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US HB7577
Bill
Status
Introduced
2/13/2026
Primary Sponsor
Steven Horsford
Click for details
AI Summary
- Eliminates the tip credit system by requiring employers to pay tipped employees the full federal minimum wage, rather than a reduced wage supplemented by tips
- Tipped employees retain all tips received, with tip pooling still permitted among employees who customarily receive tips
- Doubles the qualified tip tax deduction limit from $25,000 to $50,000 for married couples filing jointly and makes the deduction permanent
- Adds fraud prevention measures prohibiting the tip deduction for tips received from related parties or for business owners receiving tips from their own establishments
- Extends qualified tip treatment to automatic gratuities for workers in hospitality, food and beverage service, and cosmetology, effective for tax years beginning after December 31, 2025
Legislative Description
TIP Improvement Act of 2026 Tipped Income Protection and Improvement Act of 2026
Last Action
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
2/13/2026
Committee Referrals
Ways And Means2/13/2026
Full Bill Text
No bill text available