Bills · HR 7577
IN COMMITTEE· 119TH CONGRESS
House BillHR 7577Taxation
TIP Improvement Act of 2026
INTRO FEB 13· LAST ACTION FEB 13
READING
4MIN
COSPONSORS
0
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
- Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8Introduced
In Committee
Reported
Passed House
Passed Senate
Conference
To President
Became Law
WHAT THE BILL DOES
AI-writtenThis bill addresses a long-standing debate about the fairness and stability of wages for tipped workers. Currently, many tipped employees rely heavily on tips to meet their income needs, and their base pay from employers can be as low as the federal tipped minimum wage, which is significantly less than the standard federal minimum wage. If this bill becomes law, it would provide a much-needed increase in guaranteed income and financial stability for millions of tipped workers, reducing their vulnerability to slow business days or shifts with fewer customers.
For voters, this bill represents a potential shift in how a significant segment of the workforce is compensated, aiming to provide a more predictable and equitable income floor. The tax deduction changes could also lead to meaningful tax savings for tipped workers, allowing them to keep more of their earnings. If the bill does not become law, the current system of a lower tipped minimum wage and the existing, more limited tip deduction would remain in place, continuing the current financial challenges and uncertainties for many tipped employees.
KEY PROVISIONS
5AI-extractedPROVISION 01
Requires employers to pay tipped employees the full federal minimum wage, eliminating the 'tip credit' system.
This guarantees a higher and more stable base income for millions of tipped workers, reducing their reliance on tips alone.
PROVISION 02
Increases the maximum qualified tip deduction for married couples filing joint tax returns from $25,000 to $50,000.
Allows married individuals who receive tips to deduct more of their tip income, potentially lowering their tax liability.
PROVISION 03
Makes the qualified tip deduction a permanent part of the tax code and expands the definition of 'qualified tips' to include certain automatic gratuities in specific professions.
Provides a long-term tax benefit for tipped workers and broadens who can benefit from the deduction.
PROVISION 04
Strengthens penalties for employers who unlawfully keep or misuse employees' tips.
This provides stronger legal recourse and financial consequences for employers who violate tip ownership rules.
PROVISION 05
Adds rules to the tip deduction, requiring that the tip come from an unrelated person and that the tipped employee not have an ownership stake in the business.
These provisions are designed to prevent potential fraud or abuse of the tax deduction.
SPONSORSHIP
1 + 0
D· Nevada
YRS IN OFFICE
13
BILLS LED
33
ACTION TIMELINE
2 EVENTSFEB 13
Introduced in House
FEB 13
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
BILL INFO
TypeHouse Bill
NumberHR 7577
Congress119th
StatusIn Committee
IntroducedFeb 13, 2026
Last actionFeb 13, 2026
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IN COMMITTEE· 119TH CONGRESS · WAYS AND MEANS COMMITTEE · INTRODUCED FEB 13, 2026
House BillHR 7577Taxation
TIP Improvement Act of 2026
INTRODUCED FEB 13, 2026· LAST ACTION FEB 13, 2026
PASSAGE CHANCES
—%
READING
4 min
COSPONSORS
0
COMPLEXITY
Moderate
