US SB129

Creates a new federal income tax deduction for qualified tips up to $25,000 per year, available to both itemizers and non-itemizers beginning in tax year 2025

Qualified tips must be cash tips received in occupations that traditionally and customarily received tips as of December 31, 2023, with the Treasury Secretary required to publish a list of eligible occupations within 90 days of enactment

Excludes highly compensated employees from the deduction—workers whose compensation from the employer exceeded the threshold under Section 414(q)(1)(B)(i) in the preceding tax year are ineligible

Extends the existing employer tax credit for Social Security taxes paid on tips (Section 45B) to beauty service establishments, including barbering, hair care, nail care, esthetics, and body/spa treatments

Requires the Treasury Secretary to modify withholding tables and procedures to account for the new tip deduction