Qualified tips are cash tips in an occupation that customarily got tips
What the document says“The term `qualified tips' means cash tips received by an individual in an occupation which customarily and regularly received tips on or before December 31, 2024, as provided by the Secretary.”
The section defines qualified tips as cash tips received in an occupation that customarily and regularly got tips on or before December 31, 2024, as the Secretary provides. An amount is excluded unless it is paid voluntarily with no consequence for nonpayment, is not negotiated and is set by the payor; the trade or business is not a specified service trade or business as defined in section 199A(d)(2); and any other requirement the Secretary sets is met. An employee is treated as working in a specified service trade or business if the employer's business is one. Cash tips include tips paid in cash or charged and, for an employee, tips received under a tip-sharing arrangement.
What the document actually says“The term `qualified tips' means cash tips received by an individual in an occupation which customarily and regularly received tips on or before December 31, 2024, as provided by the Secretary.”
The term covers cash tips. The job must be one that got tips before the end of 2024. The Secretary decides which jobs those are.
The tip must be given freely, with no penalty for not paying. It must not be haggled over. Charged tips and shared tips count as cash tips.
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