The IRS will now define which jobs get tips and which tips count

The US Treasury Department and the IRS are proposing new rules to define which jobs "customarily and regularly" receive tips. They also define what counts as a "qualified tip" for tax deduction purposes. This means the IRS will have a clear list of jobs and tip types that qualify for certain tax benefits.

For years, the definition of a tipped occupation has been open to interpretation, leading to confusion for both employers and employees. These new rules aim to standardize how tips are treated for tax purposes, which could affect how some workers are paid and how businesses manage their payroll. It also clarifies what income can be deducted, which matters for individuals who rely on tips.