Tipped Income Protection and Support Act eliminates separate minimum wage for tipped employees.

The Tipped Income Protection and Support Act, or TIPS Act, amends the Fair Labor Standards Act of 1938 to eliminate the separate minimum wage for tipped employees. It also introduces a deduction for cash tips under the Internal Revenue Code, allowing a deduction for qualified tips received during the taxable year. This deduction is not subject to the overall limitation and is not treated as a miscellaneous itemized deduction. The bill further modifies the withholding tables and procedures to account for this new deduction. The changes apply to taxable years beginning after December 31, 2025.

Tipped Income Protection and Support Act eliminates separate minimum wage for tipped employees.

The Tipped Income Protection and Support Act, or TIPS Act, amends the Fair Labor Standards Act of 1938 to eliminate the separate minimum wage for tipped employees. It also introduces a deduction for cash tips under the Internal Revenue Code, allowing a deduction for qualified tips received during the taxable year. This deduction is not subject to the overall limitation and is not treated as a miscellaneous itemized deduction. The bill further modifies the withholding tables and procedures to account for this new deduction. The changes apply to taxable years beginning after December 31, 2025.