,i  #aai? ,,congress  #a/ ,session  ,h4 
,r4 #fbie  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,novemb] #be1         
#bjbe,mr4 ,davis ( ,nor? ,c>ol9a        
introduc$ ! foll[+ bill2 :i* 0 ref]r$ to
 ! ,committee on ,ways & ,means  ,a     
,,bill  ,to am5d ! ,int]nal ,rev5ue     
,code ( #aihf to p]man5tly exclude f    
gross income c]ta9 report$ tips = work]s
 9 eligible s]vice sectors1 to bett]    
support l[- & mod]ate-income e>n]s1 & = 
o!r purposes4  #a4 ,%ort title ,?is ,act
 may be cit$ z ,! ,work+ = ,tips ,tax   
,relief ,act ( #bjbe4  #b4 ,exclusion f 
gross income = c]ta9 report$ tips  7a7  
,9 g5]al ,"p ,,iii ( sub*apt] ,b ( *apt]
 #a ( ! ,int]nal ,rev5ue ,code ( #aihf  
is am5d$ by ins]t+ aft] section #aci;,j 
! foll[+ new section3  #aci,k4          
,exclusion ( c]ta9 report$ tips  7a7 ,9 
g5]al ,!re %all be all[$ z a d$uction an
 am\nt equal to ! qualifi$ tips receiv$ 
dur+ ! taxable ye> t are includ$ on     
/atem5ts furni%$ to ! individual        
pursuant to section #fjda7;d77#c71      

#fjda;,a7e77#c71 #fjej,w7f77#b71 or     
#fjea7;a77#ah7 ( ,public ,law #aai-ba1  
or report$ by ! taxpay] on ,=m #dacg 7or
 successor74  7b7 ,limitation  7#a7 ,9  
g5]al ,! am\nt all[$ z a d$uction "u ?is
 section = any taxable ye> %all n exce$ 
#ce1jjj4  7#b7 ,limitation bas$ on      
adju/$ gross income  7,a7 ,9 g5]al ,!   
am\nt all[able z a d$uction "u          
subsection 7a7 7aft] application (      
p>agraph 7#a77 %all be r$uc$ 7b n bel[  
z]o7 by #ej = ea* #ejj by :i* !         
taxpay]'s modifi$ adju/$ gross income is
 betwe5 #ej1jjj & #ge1jjj 7#ajj1jjj &   
#aej1jjj 9 ! case ( a jo9t return71 & no
 su* tax exclusion %all apply to        
individuals ) ,,agi ov] #ge1jjj         
7#aej1jjj 9 ! case ( a jo9t return74    
7,b7 ,modifi$ adju/$ gross income ,=    
purposes ( ?is p>agraph1 ! t]m modifi$  
adju/$ gross income means ! adju/$ gross
 income ( ! taxpay] = ! taxable ye>     
increas$ by any am\nt exclud$ f gross   
income "u section #iaa1 #ica1 or #icc ( 
,public ,law #aai-ba4  7c7 ,liv+ wage   

index+ ,! ,secret>y %all review annually
 ! national & regional liv+ wage        
e/imates & may adju/ ! exclusion or     
eligibility ?re%olds accord+ly4 7#a7    
,initial treatm5t ,?is section %all     
apply to all taxable ye>s beg9n+ aft]   
,decemb] #ca1 #bjbe1 & %all expire to ! 
taxable ye> beg9n+ on ,decemb] #ca1     
#bjbh4  7#b7 ,report+ & evaluation ,!   
,secret>y %all submit bi5nial reports to
 ,congress beg9n+ ,july #a1 #bjbg1      
assess+3 7,a7 ,utilization ( ! exclusion
 by sector & income bracket4  7,b7      
,effects on work=ce p>ticipation & wage 
equity4  7,c7 ,recomm5dations =         
enhancem5t4  7d7 ,tips receiv$ 9 c\rse (
 trade or bus9ess ,9 ! case ( qualifi$  
tips receiv$ by an individual dur+ any  
taxable ye> 9 ! c\rse ( a trade or      
bus9ess 7o!r ?an ! trade or bus9ess (   
p]=m+ s]vices z an employee7 ( su*      
individual1 su* qualifi$ tips %all be   
tak5 into acc\nt "u subsection 7a7 only 
to ! ext5t t ! gross income = ! taxpay] 
f su* trade or bus9ess = su* taxable ye>

 7includ+ su* qualifi$ tips7 exce$s !   
sum ( ! d$uctions 7o!r ?an ! d$uction   
all[$ "u ?is section7 allocable to !    
trade or bus9ess 9 :i* su* qualifi$ tips
 are receiv$ by ! individual = su*      
taxable ye>4  7d7 ,qualifi$ tips  7#a7  
,9 g5]al ,! t]m qualifi$ tips means ca% 
tips receiv$ by an individual 9 an      
occupation :i* cu/om>ily & regul>ly     
receiv$ tips on or be=e ,decemb] #ca1   
#bjbd1 z provid$ by ! ,secret>y4  7#b7  
,exclusions ,su* t]m %all n include any 
am\nt receiv$ by an individual unless-- 
7,a7 su* am\nt is paid volunt>ily )\t   
any consequ5ce 9 ! ev5t ( nonpaym5t1 is 
n ! subject ( negotiation1 & is det]m9$ 
by ! payor1  7,b7 ! trade or bus9ess 9 !
 c\rse ( :i* ! individual receives su*  
am\nt is n a specifi$ s]vice trade or   
bus9ess 7z def9$ 9 section              
#aii;,a7d77#b771 &  7,c7 su* o!r        
requirem5ts z may be e/abli%$ by !      
,secret>y 9 regulations or o!r guidance 
are satisfi$4 ,= purposes ( subp>agraph 
7,b71 9 ! case ( an individual receiv+  

tips 9 ! trade or bus9ess ( p]=m+       
s]vices z an employee1 su* individual   
%all be treat$ z receiv+ tips 9 ! c\rse 
( a trade or bus9ess :i* is a specifi$  
s]vice trade or bus9ess if ! trade or   
bus9ess ( ! employ] is a specifi$ s]vice
 trade or bus9ess4  7#c7 ,ca% tips ,!   
t]m ca% tips includes tips receiv$ f    
cu/om]s t are paid 9 ca% or *>g$ &1 9 ! 
case ( an employee1 tips receiv$ "u any 
tip-%>+ arrangem5t4  7e7 ,social        
security numb] requir$  7#a7 ,9 g5]al   
,no d$uction %all be all[$ "u ?is       
section unless ! taxpay] includes on !  
return ( tax = ! taxable ye> su*        
individual's social security numb]4     
7#b7 ,social security numb] def9$ ,! t]m
 social security numb] %all h ! mean+   
giv5 su* t]m 9 section #bd7;h77#g74  7f7
 ,m>ri$ individuals ,if ! taxpay] is a  
m>ri$ individual 7)9 ! mean+ ( section  
#ggjc71 ?is section %all apply only if !
 taxpay] & ! taxpay]'s sp\se file a jo9t
 return = ! taxable ye>4  7g7           
,regulations ,! ,secret>y %all prescribe

 su* regulations or o!r guidance z may  
be necess>y to prev5t reclassification (
 income z qualifi$ tips1 includ+        
regulations or o!r guidance to prev5t   
abuse ( ! d$uction all[$ by ?is section4
  4  7b7 ,d$uction all[$ to             
non-,itemiz]s ,section #fc7;b7 is am5d$ 
by /rik+ 8&0 at ! end ( p>agraph 7#c71  
by /rik+ ! p]iod at ! end ( p>agraph    
7#d7 & ins]t+ 81 &01 & by add+ at ! end 
! foll[+ new p>agraph3  7#e7 ! d$uction 
provid$ 9 section #bbd4  4  7c7         
,omission ( correct social security     
numb] treat$ z ma!matical or cl]ical    
error ,section #fbac7;g77#b71 z am5d$ by
 ! prec$+ provisions ( ?is ,act1 is     
am5d$ by /rik+ 8&0 at ! end (           
subp>agraph 7,w71 by /rik+ ! p]iod at ! 
end ( subp>agraph 7,x7 & ins]t+ 81 &01 &
 by ins]t+ aft] subp>agraph 7,x7 !      
foll[+ new subp>agraph3  7,y7 an        
omission ( a correct social security    
numb] requir$ "u section #bbd7;e7       
7relat+ to d$uction = qualifi$ tips74  4
  7d7 ,exclusion f qualifi$ bus9ess     

income ,section #aii;,a7c77#d7 is am5d$ 
by /rik+ 8&0 at ! end ( subp>agraph     
7,b71 by /rik+ ! p]iod at ! end (       
subp>agraph 7,c7 & ins]t+ 81 &01 & by   
add+ at ! end ! foll[+ new subp>agraph3 
7,d7 any am\nt ) respect to :i* a       
d$uction is all[able to ! taxpay] "u    
section #bbd7;a7 = ! taxable ye>4  4    
7e7 ,publi%$ li/ ( occupations          
traditionally receiv+ tips ,n lat] ?an  
#ij days aft] ! date ( ! enactm5t ( ?is 
,act1 ! ,secret>y ( ! ,treasury 7or !   
,secret>y's delegate7 %all publi% a li/ 
( occupations :i* cu/om>ily & regul>ly  
receiv$ tips on or be=e ,decemb] #ca1   
#bjbd1 = purposes ( section #bbd7;d77#a7
 ( ! ,int]nal ,rev5ue ,code ( #aihf 7z  
add$ by subsection 7a774  7f7 ,)hold+ ,!
 ,secret>y ( ! ,treasury 7or !          
,secret>y's delegate7 %all modify !     
proc$ures prescrib$ "u section #cdjb7;a7
 ( ! ,int]nal ,rev5ue ,code ( #aihf =   
taxable ye>s beg9n+ aft] ,decemb] #ca1  
#bjbe1 to take into acc\nt ! d$uction   
all[$ "u section #bbd ( su* ,code 7z    

add$ by ?is ,act74  7g7 ,effective date 
,! am5dm5ts made by ?is section %all    
apply to taxable ye>s beg9n+ aft]       
,decemb] #ca1 #bjbd1 & end+ ,decemb]    
#ca1 #bjbf4  7h7 ,pilot program ,^u     
expiration ( ?is section1 ! ,secret>y ( 
! ,treasury %all comm5ce a pilot program
 to exam9e ! pot5tial b5efits to ext5d+ 
! tipp$ wage tax exemptions z outl9$ 9  
?is section p]man5tly & )\t expiration4 
7i7 ,transition rule ,9 ! case ( any ca%
 tips requir$ to be report$ = p]iods    
be=e ,janu>y #a1 #bjbf1 p]sons requir$  
to file returns or /atem5ts "u section  
#fjda7;a71 #fjda7;d77#c71 #fjda;,a7a71  
#fjda;,a7e77#c71 #fjej,w7a71 or         
#fjej,w7f77#b7 ( ! ,int]nal ,rev5ue     
,code ( #aihf 7z am5d$ by ?is section7  
may approximate a sep>ate acc\nt+ (     
am\nts designat$ z ca% tips by any      
reasonable me?od specifi$ by !          
,secret>y4