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NO TAX ON TIPS AND OVERTIME EXPLAINED (EXCERPTS) :
Treasury Tipped Occupation Code, provides a three-digit code and descriptions for the occupations listed within the proposed regulations:
100s – Beverage and Food Service
200s – Entertainment and Events
300s – Hospitality and Guest Services
400s – Home Services
500s – Personal Services
600s – Personal Appearance and Wellness
700s – Recreation and Instruction
800s – Transportation and Delivery
In order to claim the deduction, a worker must both be in an occupation on the list and receive qualified tips. The IRS proposed regulations provide a definition of qualified and not qualified tips which includes the following factors: Qualified tips must be paid in cash or an equivalent medium, such as check, credit card, debit card, gift card, tangible or intangible tokens that are readily exchangeable for a fixed amount in cash, or another form of electronic settlement or mobile payment application (excluding most digital assets) denominated in cash. Qualified tips must be received from customers or, in the case of an employee, through a mandatory or voluntary tip-sharing arrangement, such as a tip pool. Qualified tips must be paid voluntarily by the customer and not be subject to negotiation.
Do you all have any tax related questions or comments? Stop by or contact us at 254-699-5600 (JimE)(CAA & Notary )starry) or 699-4209 (TomR) (EA, OIC Expert).
