Rep. Gabe Vasquez Champions Bill to Stop Federal Taxes on Tips

WASHINGTON, D.C. – Today, U.S. Representative Gabe Vasquez (NM-02) cosponsored H.R. 1314, the Tipped Income Protection and Support (TIPS) Act to permanently eliminate federal income taxes on tips and end the sub-minimum wage for tipped workers.

“This bill is about justice, dignity, and economic fairness for the workers who keep our restaurants, hotels, and service industries running,” said Vasquez. “No one working a full-time job should be stuck with a $2.13 wage or taxed on the tips they rely on to make ends meet. This legislation puts more money back in the pockets of hardworking New Mexicans and ensures no one is left behind in today’s economy.”

The TIPS Act would exempt tipped income from federal income tax for workers earning under $112,500 annually and end the federal tipped minimum wage, currently set at just $2.13 an hour. Nearly six million Americans rely on tips to pay the bills, with many earning less than $37,000 a year.

The TIPS Act permanently protects Americans’ tips income from federal taxation. By contrast, the no tax on tips provisions in the Big Ugly Big exempt taxes on tips for only four years – while cutting health care benefits for millions to pay for permanent tax breaks for the wealthy. 

Rep. Vasquez remains committed to lowering costs and delivering real results for New Mexico’s working families. He previously introduced a package of tax bills to benefit the middle class, address rising costs, and incentives businesses to hire veterans. 

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