I 
119TH CONGRESS 
1ST SESSION H. R. 6295 
To amend the Internal Revenue Code of 1986 to permanently exclude from 
gross income certain reported tips for workers in eligible service sectors, 
to better support low- and moderate-income earners, and for other pur-
poses. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 25, 2025 
Mr. DAVIS of North Carolina 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 permanently 
exclude from gross income certain reported tips for work-
ers in eligible service sectors, to better support low- 
and moderate-income earners, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as ‘‘The Working for Tips Tax 
Relief Act of 2025’’. 
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SEC. 2. EXCLUSION FROM GROSS INCOME FOR CERTAIN 
REPORTED TIPS. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 139J the following new section: 
‘‘SEC. 139K. EXCLUSION OF CERTAIN REPORTED TIPS. 
‘‘(a) IN GENERAL.—There shall be allowed as a de-
duction an amount equal to the qualified tips received dur-
ing the taxable year that are included on statements fur-
nished to the individual pursuant to section 6041(d)(3), 
6041A(e)(3), 6050W(f)(2), or 6051(a)(18) of Public Law 
119–21, or reported by the taxpayer on Form 4137 (or 
successor). 
‘‘(b) LIMITATION.— 
‘‘(1) IN GENERAL.—The amount allowed as a 
deduction under this section for any taxable year 
shall not exceed $35,000. 
‘‘(2) LIMITATION BASED ON ADJUSTED GROSS 
INCOME.— 
‘‘(A) IN GENERAL.—The amount allowable 
as a deduction under subsection (a) (after ap-
plication of paragraph (1)) shall be reduced 
(but not below zero) by $50 for each $500 by 
which the taxpayer’s modified adjusted gross 
income is between $50,000 and $75,000 
($100,000 and $150,000 in the case of a joint 
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return), and no such tax exclusion shall apply 
to 
individuals 
with 
AGI 
over 
$75,000 
($150,000 in the case of a joint return). 
‘‘(B) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of this paragraph, the 
term ‘modified adjusted gross income’ means 
the adjusted gross income of the taxpayer for 
the taxable year increased by any amount ex-
cluded from gross income under section 911, 
931, or 933 of Public Law 119–21. 
‘‘(c) LIVING WAGE INDEXING.—The Secretary shall 
review annually the national and regional living wage esti-
mates and may adjust the exclusion or eligibility thresh-
olds accordingly. 
‘‘(1) INITIAL TREATMENT.—This section shall 
apply to all taxable years beginning after December 
31, 2025, and shall expire to the taxable year begin-
ning on December 31, 2028. 
‘‘(2) REPORTING AND EVALUATION.—The Sec-
retary shall submit biennial reports to Congress be-
ginning July 1, 2027, assessing: 
‘‘(A) Utilization of the exclusion by sector 
and income bracket. 
‘‘(B) Effects on workforce participation 
and wage equity. 
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‘‘(C) Recommendations for enhancement. 
‘‘(d) TIPS RECEIVED IN COURSE OF TRADE OR BUSI-
NESS.—In the case of qualified tips received by an indi-
vidual during any taxable year in the course of a trade 
or business (other than the trade or business of per-
forming services as an employee) of such individual, such 
qualified tips shall be taken into account under subsection 
(a) only to the extent that the gross income for the tax-
payer from such trade or business for such taxable year 
(including such qualified tips) exceeds the sum of the de-
ductions (other than the deduction allowed under this sec-
tion) allocable to the trade or business in which such quali-
fied tips are received by the individual for such taxable 
year. 
‘‘(d) QUALIFIED TIPS.— 
‘‘(1) IN GENERAL.—The term ‘qualified tips’ 
means cash tips received by an individual in an oc-
cupation which customarily and regularly received 
tips on or before December 31, 2024, as provided by 
the Secretary. 
‘‘(2) EXCLUSIONS.—Such term shall not in-
clude any amount received by an individual unless— 
‘‘(A) such amount is paid voluntarily with-
out any consequence in the event of non-
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on the return of tax for the taxable year such indi-
vidual’s social security number. 
‘‘(2) SOCIAL
SECURITY
NUMBER
DEFINED.— 
The term ‘social security number’ shall have the 
meaning given such term in section 24(h)(7). 
‘‘(f) MARRIED INDIVIDUALS.—If the taxpayer is a 
married individual (within the meaning of section 7703), 
this section shall apply only if the taxpayer and the tax-
payer’s spouse file a joint return for the taxable year. 
‘‘(g) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary 
to prevent reclassification of income as qualified tips, in-
cluding regulations or other guidance to prevent abuse of 
the deduction allowed by this section.’’. 
(b) DEDUCTION ALLOWED
TO NON-ITEMIZERS.— 
Section 63(b) is amended by striking ‘‘and’’ at the end 
of paragraph (3), by striking the period at the end of para-
graph (4) and inserting ‘‘, and’’, and by adding at the 
end the following new paragraph: 
‘‘(5) the deduction provided in section 224.’’. 
(c) OMISSION OF CORRECT SOCIAL SECURITY NUM-
BER
TREATED
AS
MATHEMATICAL
OR
CLERICAL 
ERROR.—Section 6213(g)(2), as amended by the pre-
ceding provisions of this Act, is amended by striking 
‘‘and’’ at the end of subparagraph (W), by striking the 
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period at the end of subparagraph (X) and inserting ‘‘, 
and’’, and by inserting after subparagraph (X) the fol-
lowing new subparagraph: 
‘‘(Y) an omission of a correct social secu-
rity number required under section 224(e) (re-
lating to deduction for qualified tips).’’. 
(d) EXCLUSION FROM QUALIFIED BUSINESS IN-
COME.—Section 199A(c)(4) is amended by striking ‘‘and’’ 
at the end of subparagraph (B), by striking the period 
at the end of subparagraph (C) and inserting ‘‘, and’’, and 
by adding at the end the following new subparagraph: 
‘‘(D) any amount with respect to which a 
deduction is allowable to the taxpayer under 
section 224(a) for the taxable year.’’. 
(e) PUBLISHED LIST OF OCCUPATIONS TRADITION-
ALLY RECEIVING TIPS.—Not later than 90 days after the 
date of the enactment of this Act, the Secretary of the 
Treasury (or the Secretary’s delegate) shall publish a list 
of occupations which customarily and regularly received 
tips on or before December 31, 2024, for purposes of sec-
tion 224(d)(1) of the Internal Revenue Code of 1986 (as 
added by subsection (a)). 
(f) WITHHOLDING.—The Secretary of the Treasury 
(or the Secretary’s delegate) shall modify the procedures 
prescribed under section 3402(a) of the Internal Revenue 
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Code of 1986 for taxable years beginning after December 
31, 2025, to take into account the deduction allowed under 
section 224 of such Code (as added by this Act). 
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2024, and ending December 31, 2026. 
(h) PILOT PROGRAM.—Upon expiration of this sec-
tion, the Secretary of the Treasury shall commence a pilot 
program to examine the potential benefits to extending the 
tipped wage tax exemptions as outlined in this section per-
manently and without expiration. 
(i) TRANSITION RULE.—In the case of any cash tips 
required to be reported for periods before January 1, 
2026, persons required to file returns or statements under 
section 6041(a), 6041(d)(3), 6041A(a), 6041A(e)(3), 
6050W(a), or 6050W(f)(2) of the Internal Revenue Code 
of 1986 (as amended by this section) may approximate 
a separate accounting of amounts designated as cash tips 
by any reasonable method specified by the Secretary. 
Æ 
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