By Kerry Picket | The Washington Times
Senate Republicans recently crafted legislation off of former President Donald Trump’s proposal to eliminate federal taxes from tips off of wages.
The “No Tax on Tips Act” exempts “cash tips” — cash, credit and debit card charges, and checks — from federal income tax by allowing taxpayers to claim a 100% above-the-line deduction at filing for tipped wages.
According to the IRS, cash tips include “those received directly from customers, electronically paid tips distributed to the employee by their employer and tips received from other employees under any tip-sharing arrangement. All cash tips must be reported to the employer.”