22 Sep 2025
💵New IRS Regulations on Qualified Tips and Tax Deductions
Occupations That Customarily and Regularly Received Tips; Definition of Qualified Tips
Summary
This document contains proposed regulations that identify occupations that customarily and regularly received tips on or before December 31, 2024, and provide a definition of "qualified tips" for purposes of the income tax deduction for qualified tips. These proposed regulations affect individuals who receive tips as part of their occupation.
Agencies
- Treasury Department
- Internal Revenue Service
Business Impact
$$$ - High
The proposed regulations introduce the definition of "qualified tips" and outline the deduction's eligibility requirements, impacting business owners and employees in tip-receiving occupations. This creates compliance and financial implications, as companies must ensure they report tips accurately according to the new rules.