Tips earned in a business count only above the business's other deductions
To provide for reconciliation pursuant to title II of H. Con. Res. 14, section 70201, Sec. 70201.
Written by .
Tips earned in a business count only above the business's other deductions
The document says “shall”Who acts: Secretary of the TreasuryHow: statuteSec. 70201 in the PDF
What the document says
“such qualified tips shall be taken into account under subsection (a) only to the extent that the gross income for the taxpayer from such trade or business for such taxable year (including such qualified tips) exceeds the sum of the deductions”
The section provides that where qualified tips are received in the course of a trade or business other than performing services as an employee, they count toward the deduction only so far as the gross income from that business for the year, including the tips, exceeds the deductions allocable to that business other than the tip deduction itself.
What the document actually says
“such qualified tips shall be taken into account under subsection (a) only to the extent that the gross income for the taxpayer from such trade or business for such taxable year (including such qualified tips) exceeds the sum of the deductions”
That sentence, in plain words
Tips earned in a business count only up to a point. The business income must first clear its other costs.
What this is about
This applies to people who are not employees. A business running at a loss gets no break. Only the part above costs counts.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Provide for reconciliation pursuant to title II of H. Con. Res. 14, Public Law 119-21, sec. 70201, 139 Stat. 170 (2025). https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm
This page
“Tips earned in a business count only above the business's other deductions,” Provide for reconciliation pursuant to title II of H. Con. Res. 14, section 70201, Sec. 70201. Read the Mandate, https://readthemandate.org/pl-119-21/proposal/sec70201-trade-or-business/ (retrieved October 10, 2026).
Cite the document when the claim is about what the document says. Cite this page when the indexing, the wording or the record of what has happened is what is being relied on.
How to Read This Page
The quotation is the document's own words, exactly as printed, checked against the page
number against the Act itself before publishing. The paragraph underneath is our summary,
not the document's words. So is the plain English version, which is why it sits beside the
quotation rather than replacing it.
