What does Preamble of HR 7577 do?

This bill proposes amendments to the Fair Labor Standards Act of 1938 concerning the minimum wage for tipped workers. The bill also proposes amendments to the Internal Revenue Code of 1986 to expand and make permanent the qualified tip deduction. The bill was introduced in the House of Representatives on February 13, 2026, by Mr. Horsford.

What does SHORT TITLE. of HR 7577 do?

This bill is formally titled the Tipped Income Protection and Improvement Act of 2026.

What does MINIMUM WAGE FOR TIPPED EMPLOYEES. of HR 7577 do?

This section amends the Fair Labor Standards Act of 1938 regarding minimum wage for tipped employees. It modifies section 3(m)(2)(A) to require tipped employees be paid the wage set forth in section 6(a)(1) and allows employees to retain all tips, except for tip pooling. The section also amends section 16 to adjust penalties for employers who unlawfully use or keep tips.

What does QUALIFIED TIP DEDUCTION MADE PERMANENT AND EXPANDED. of HR 7577 do?

This section amends the Internal Revenue Code of 1986 regarding qualified tip deductions. It increases the deduction limit for joint returns to twice the amount, which is $25,000 for single filers. It adds new requirements to prevent waste, fraud, and abuse, including restrictions based on relationships to the individual and ownership stakes in the employing business. It mandates the inclusion of a taxpayer identification number on tax returns to claim the deduction. It expands the definition of 'qualified tips' to include automatic gratuities for individuals in hospitality, food and beverage service, or cosmetology, provided certain conditions are met. It makes the qualified tip deduction permanent by striking subsection (h) of Section 224. It restructures subsections (f) and (g) of Section 224. The amendments apply to taxable years beginning after December 31, 2025.

Back to bills

TIP Improvement Act of 2026 — HR. 7577

Last updated: 2/13/2026 · Introduced: 2/13/2026

Author: Steven Horsford (D-NV)

TL;DR (AI)

This bill requires employers to pay tipped employees the standard minimum wage and allows employees to keep all tips, except those used for tip pooling.
The bill expands and permanently establishes a qualified tip deduction for tax purposes, increasing the deduction limit for joint filers to $50,000 and adding requirements to prevent fraud.
The bill expands the definition of 'qualified tips' to include automatic gratuities and mandates taxpayer identification numbers for claiming the deduction.

119th Congressin committeeOfficial page

Verified Votes

No verified votes yet.

Community Votes

No community votes yet. Be the first!

Voting as guest · Sign in for verified votes

Other Sections

Includes provisions on preamble, short title., and 2 more.

4 sections

Click "Show details" to explore individual sections. Use the community vote above or visit All Sections to vote per section.

Read official text

Want the full experience?

Create a free account to cast verified votes on each section, get a personalized summary, and track your voting history.

Create Free Account