Ely, Nev. – U.S. Senator Catherine Cortez Masto (D-Nev.) today led Senator Jacky Rosen (D-Nev.) and Representatives Dina Titus (D-Nev.-01), Susie Lee (D-Nev.-03), and Steven Horsford (D-Nev.-04) in a letter to U.S. Treasury Secretary and Acting Internal Revenue Service (IRS) Commissioner Scott Bessent calling on the Trump Administration to address barriers in implementation of the ‘No Tax on Tips’ provisions that would hurt tipped workers in Nevada.
“As you know, H.R. 1, an Act to provide for reconciliation pursuant to title II of H. Con. Res. 14, provided that certain taxpayers may take a deduction of up to $25,000 annually to reduce or eliminate taxable income on tipped wages,” wrote the Members. “This proposal closely models legislation introduced or cosponsored by Nevada lawmakers in both the House and Senate. As you know, Nevadans rely on tips more than any other state in the nation and tax relief has been a critical bipartisan priority. Given our work on proposals related to Section 70201, we would like to highlight the following issues for the Department of Treasury in order to ensure the successful implementation of this provision for our constituents and tipped workers across the country.”
Specifically, the Members call on the administration to:
- Provide withholding as soon as practicable to ensure taxpayers feel tax relief this year
- Maintain Gaming Industry Tip Compliance Agreements (GITCA) and related programs
- Provide the ability for employees under a GITCA to take the tips deduction based on their tip rate if they choose
- Include as eligible for the deduction tips from transactions with auto-gratuities or suggested tip amounts
- Allow married individuals who file with a SSN on a joint return to be eligible for the deduction, regardless of the filing method of their spouse and allow up to $50,000 in deductions for married couples
- Provide maximum clarity for filers regarding how to determine what occupation they serve in and how to determine eligibility for the deduction
- Issue regulations that allow the ability of performing artists to use the deduction when their occupation otherwise has traditionally received tips
“As lawmakers representing our nation’s most hospitality and service industry dependent economy, we hope to maintain a productive dialogue with Treasury and IRS as your agencies work to implement this provision. Please do not hesitate to reach out if we can be of assistance, and we look forward to your response,” the Members concluded.
Read the full letter here.
Senator Cortez Masto has consistently supported efforts to lower costs for hardworking Nevadans. She helped pass critical expansions to the Child Tax Credit in the American Rescue Plan, and has been fighting to permanently increase this vital relief for working families. Cortez Masto also helped introduce the No Tax on Tips Act to exempt tipped wages from federal income tax. Additionally, Senator Cortez Masto supports raising the federal minimum wage and eliminating the minimum wage gap for tipped workers nationally.
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