This week the IRS issued guidance while we await the final rules regarding tax-free tips. Nearly 70 different occupations qualify, including that qualify as tax-free income, including from nearly 70 different types of occupations, including bartenders, taxi and rideshare drivers, hairdressers, and hotel housekeepers.
The tips have to be “qualified” meaning it has to be a cash tip received by someone in an occupation that typically and regularly received tips through 2024 (so no creating new categories such as tipping your dentist or lawyer). Mandatory tips, for example that a restaurant may charge for a party over a certain time, are taxable. To read all of the proposed rules and the current guidance, click here.
