Tax Model Analysis Options to Change the Taxation of Tips (September 2024)

Tables show the change in federal tax revenue and burden, from several options to exclude tips from federal taxes. Distribution and revenue estimates are shown for calendar year 2025.

Simulation Run September 17, 2024
  • T24-0063 — Allow Individual Income Tax Deduction for Eligible Tips Reported by Employees with Adjusted Gross Income Less than $75,000, by ECI Level, 2025
  • T24-0064 — Allow Individual Income Tax Deduction for Eligible Tips Reported by Employees with Adjusted Gross Income Less than $75,000, by ECI Percentile, 2025
  • T24-0065 — Allow Individual Income Tax Deduction for Eligible Tips Reported by Employees, by ECI Level, 2025
  • T24-0066 — Allow Individual Income Tax Deduction for Eligible Tips Reported by Employees, by ECI Percentile, 2025
  • T24-0067 — Allow Individual Income Tax Deduction for Eligible Tips Reported by Employees and Exclude those Tips from Wages for Payroll Tax Purposes, by ECI Level, 2025
  • T24-0068 — Allow Individual Income Tax Deduction for Eligible Tips Reported by Employees and Exclude those Tips from Wages for Payroll Tax Purposes, by ECI Percentile, 2025
  • T24-0069 — Options to Change the Taxation of Tips, Summary of Revenue and Distributional Effects, 2025