[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 558 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 558

To amend the Internal Revenue Code of 1986 to provide that certain tips 
     shall not be subject to income taxes for a period of 5 years.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 20, 2025

  Mr. Bacon introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide that certain tips 
     shall not be subject to income taxes for a period of 5 years.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tip Tax Termination Act''.

SEC. 2. EXCLUSION FROM GROSS INCOME OF CERTAIN TIPPED WAGES.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139I the following new section:

``SEC. 139J. CERTAIN TIPPED WAGES.

    ``(a) In General.--Gross income shall not include so much of the 
eligible tips received by an individual during the taxable year as does 
not exceed $20,000.
    ``(b) Eligible Tips.--For purposes of this section, the term 
`eligible tips' means amounts received while performing services which 
constitute employment in a position which generally relies on tips as 
part of wages, including cosmetology, hospitality, and food service.
    ``(c) Denial of Double Benefit.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        amount which is excluded from gross income under this section 
        shall not be taken into account in determining any deduction or 
        credit under this chapter.
            ``(2) Exception for child tax credit; earned income 
        credit.--The amount excluded from gross income under this 
        section shall be taken into account for purposes of determining 
        the credits under sections 24 and 32.
    ``(d) Termination.--This section shall not apply to tips received 
after December 31, 2029.''.
    (b) Withholding.--The Secretary of the Treasury (or the Secretary's 
delegate) shall modify the tables and procedures prescribed under 
section 3402(a) of the Internal Revenue Code of 1986 to take into 
account amounts excludible from gross income under section 139J of such 
Code (as added by this Act).
    (c) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by inserting after 
the item relating to section 139I the following new item:

``Sec. 139J. Certain tipped wages.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts received after December 31, 2024.
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