Tipped workers would get full minimum wage, and tip deductions would expand for many.
This bill would require employers to pay tipped workers the full federal minimum wage, ending the current "tip credit" system. It would also make a tax deduction for qualified tips permanent and expand it. This applies especially for couples filing jointly and certain service workers, starting with tax years after December 31, 2025.
Today, employers can pay tipped workers a lower direct wage, using a "tip credit" to meet the federal minimum wage. This bill would require employers to pay tipped workers the full federal minimum wage directly. Additionally, a tax deduction for qualified tips, which currently has certain limits and is not permanent, would become permanent. It would also allow couples filing jointly to deduct twice the base amount of $25,000. Additionally, it would include automatic gratuities for some workers, starting for tax years after December 31, 2025.
HR 7577 · 119th Congress · February 13, 2026 · AI Summary by gemini-2.5-flash · 8/10
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Amounts reflect total quarterly lobbying spend reported to the Senate, not bill-specific spending. Source: Senate LDA filings.