Payers must report cash tips and the occupation separately
What the document says“in the case of compensation to non-employees, the portion of payments that have been reasonably designated as cash tips and the occupation described in section 224(d)(1) of the person receiving such tips.”
The section amends sections 6041, 6041A, 6050W and 6051 of the Internal Revenue Code of 1986 so that returns and statements to the Secretary and to the payee separately account for amounts reasonably designated as cash tips and name the occupation described in section 224(d)(1) of the person receiving them. For cash tips reportable for periods before January 1, 2026, filers may approximate that separate accounting by any reasonable method the Secretary specifies.
What the document actually says“in the case of compensation to non-employees, the portion of payments that have been reasonably designated as cash tips and the occupation described in section 224(d)(1) of the person receiving such tips.”
A payer must report the part of a payment that is a cash tip. It must also name the job of the person paid. This covers people who are not employees.
The same duty is added in four places. It reaches employers and payment firms. For periods before 2026 an estimate may be used.
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