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Qualified tips

For purposes of this section—

(1) In general

(1)In general#

The term “qualified tips” means cash tips received by an individual in an occupation which customarily and regularly received tips on or before December 31, 2024 , as provided by the Secretary.

(2)Exclusions#

Such term shall not include any amount received by an individual unless—

(A) such amount is paid voluntarily without any consequence in the event of nonpayment, is not the subject of negotiation, and is determined by the payor,

(B) the trade or business in the course of which the individual receives such amount is not a specified service trade or business (as defined in section 199A(d)(2)), and

For purposes of subparagraph (B), in the case of an individual receiving tips in the trade or business of performing services as an employee, such individual shall be treated as receiving tips in the course of a trade or business which is a specified service trade or business if the trade or business of the employer is a specified service trade or business.

(3)Cash tips#

For purposes of paragraph (1), the term “cash tips” includes tips received from customers that are paid in cash or charged and, in the case of an employee, tips received under any tip-sharing arrangement.

in view

Whole section

▸rulespec code

Shown source

statutes/26/224.yaml

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Rules

qualified_tips_deduction_cap

Parameter

source: 26 USC 224(b)(1)

- name: qualified_tips_deduction_cap
  kind: parameter
  dtype: Money
  unit: USD
  source: 26 USC 224(b)(1)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: amount
          source:
            corpus_citation_path: us/statute/26/224
            text: >-
              The amount allowed as a deduction under this section for any taxable year shall not
              exceed $25,000.
  versions:
    - effective_from: '2025-01-01'
      formula: '25000'

qualified_tips_phaseout_reduction

Parameter

source: 26 USC 224(b)(2)(A)

- name: qualified_tips_phaseout_reduction
  kind: parameter
  dtype: Money
  unit: USD
  source: 26 USC 224(b)(2)(A)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: amount
          source:
            corpus_citation_path: us/statute/26/224
            text: shall be reduced (but not below zero) by $100 for each $1,000
  versions:
    - effective_from: '2025-01-01'
      formula: '100'

qualified_tips_phaseout_increment

Parameter

source: 26 USC 224(b)(2)(A)

- name: qualified_tips_phaseout_increment
  kind: parameter
  dtype: Money
  unit: USD
  source: 26 USC 224(b)(2)(A)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: amount
          source:
            corpus_citation_path: us/statute/26/224
            text: by $100 for each $1,000 by which the taxpayer’s modified adjusted gross income exceeds
  versions:
    - effective_from: '2025-01-01'
      formula: '1000'

qualified_tips_phaseout_threshold_other

Parameter

source: 26 USC 224(b)(2)(A)

- name: qualified_tips_phaseout_threshold_other
  kind: parameter
  dtype: Money
  unit: USD
  source: 26 USC 224(b)(2)(A)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: amount
          source:
            corpus_citation_path: us/statute/26/224
            text: exceeds $150,000 ($300,000 in the case of a joint return)
  versions:
    - effective_from: '2025-01-01'
      formula: '150000'

qualified_tips_phaseout_threshold_joint

Parameter

source: 26 USC 224(b)(2)(A)

- name: qualified_tips_phaseout_threshold_joint
  kind: parameter
  dtype: Money
  unit: USD
  source: 26 USC 224(b)(2)(A)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: amount
          source:
            corpus_citation_path: us/statute/26/224
            text: $300,000 in the case of a joint return
  versions:
    - effective_from: '2025-01-01'
      formula: '300000'

qualified_tips_modified_adjusted_gross_income

Derived

source: 26 USC 224(b)(2)(B)

- name: qualified_tips_modified_adjusted_gross_income
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(b)(2)(B)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              modified adjusted gross income means the adjusted gross income of the taxpayer for the
              taxable year increased by any amount excluded from gross income under section 911,
              931, or 933
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/911/a#section_911_amount_excluded_from_gross_income
            output: section_911_amount_excluded_from_gross_income
            hash: sha256:b128d251a0f74fc46a27e516e864e53c8d25442f5b419c7bb3bb4b607542d725
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/931#amount_excluded_from_gross_income_under_section_931
            output: amount_excluded_from_gross_income_under_section_931
            hash: sha256:1fa430ea6a413cdaea822ffd05121d78a82954e52929f5a8e48a80c85249c295
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/933#income_excluded_from_gross_income_under_section_933
            output: income_excluded_from_gross_income_under_section_933
            hash: sha256:e9b939801362efae757d1886823555c38a5f4ea828538308fe531f3619adc72f
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        max(
            0,
            adjusted_gross_income
            + section_911_amount_excluded_from_gross_income
            + amount_excluded_from_gross_income_under_section_931
            + income_excluded_from_gross_income_under_section_933
        )

qualified_tips_phaseout_threshold

Derived

source: 26 USC 224(b)(2)(A)

- name: qualified_tips_phaseout_threshold
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(b)(2)(A)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: exceeds $150,000 ($300,000 in the case of a joint return)
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_phaseout_threshold_other
            output: qualified_tips_phaseout_threshold_other
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_phaseout_threshold_joint
            output: qualified_tips_phaseout_threshold_joint
            hash: sha256:local
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        if (filing_status == 1):
            qualified_tips_phaseout_threshold_joint
        else:
            qualified_tips_phaseout_threshold_other

nonemployee_trade_or_business_qualified_tips_taken_into_account

Derived

source: 26 USC 224(c)

- name: nonemployee_trade_or_business_qualified_tips_taken_into_account
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(c)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              such qualified tips shall be taken into account under subsection (a) only to the
              extent that the gross income for the taxpayer from such trade or business for such
              taxable year (including such qualified tips) exceeds the sum of the deductions (other
              than the deduction allowed under this section) allocable to the trade or business
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        min(
            max(0, nonemployee_trade_or_business_qualified_tips_included_on_statements_or_form_4137),
            max(
                0,
                gross_income_from_nonemployee_trade_or_business_including_qualified_tips
                - deductions_allocable_to_nonemployee_trade_or_business_other_than_section_224
            )
        )

qualified_tips_taken_into_account_before_cap

Derived

source: 26 USC 224(a), 224(c)

- name: qualified_tips_taken_into_account_before_cap
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(a), 224(c)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              an amount equal to the qualified tips received during the taxable year that are
              included on statements ... or reported by the taxpayer on Form 4137 (or successor)
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#nonemployee_trade_or_business_qualified_tips_taken_into_account
            output: nonemployee_trade_or_business_qualified_tips_taken_into_account
            hash: sha256:local
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        max(0, employee_qualified_tips_included_on_statements_or_form_4137)
        + nonemployee_trade_or_business_qualified_tips_taken_into_account

qualified_tips_deduction_before_phaseout

Derived

source: 26 USC 224(b)(1)

- name: qualified_tips_deduction_before_phaseout
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(b)(1)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              The amount allowed as a deduction under this section for any taxable year shall not
              exceed $25,000.
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_deduction_cap
            output: qualified_tips_deduction_cap
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_taken_into_account_before_cap
            output: qualified_tips_taken_into_account_before_cap
            hash: sha256:local
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        min(
            qualified_tips_deduction_cap,
            qualified_tips_taken_into_account_before_cap
        )

qualified_tips_phaseout_amount

Derived

source: 26 USC 224(b)(2)(A)

- name: qualified_tips_phaseout_amount
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(b)(2)(A)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              shall be reduced (but not below zero) by $100 for each $1,000 by which the taxpayer’s
              modified adjusted gross income exceeds
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_phaseout_reduction
            output: qualified_tips_phaseout_reduction
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_phaseout_increment
            output: qualified_tips_phaseout_increment
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_modified_adjusted_gross_income
            output: qualified_tips_modified_adjusted_gross_income
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_phaseout_threshold
            output: qualified_tips_phaseout_threshold
            hash: sha256:local
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        floor(
            max(
                0,
                qualified_tips_modified_adjusted_gross_income
                - qualified_tips_phaseout_threshold
            )
            / qualified_tips_phaseout_increment
        )
        * qualified_tips_phaseout_reduction

qualified_tips_deduction_eligibility

Derived

source: 26 USC 224(e), 224(f), 224(h)

- name: qualified_tips_deduction_eligibility
  kind: derived
  entity: TaxUnit
  dtype: Judgment
  period: Year
  source: 26 USC 224(e), 224(f), 224(h)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              No deduction shall be allowed under this section unless the taxpayer includes on the
              return of tax for the taxable year such individual’s social security number.
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              If the taxpayer is a married individual (within the meaning of section 7703), this
              section shall apply only if the taxpayer and the taxpayer’s spouse file a joint return
              for the taxable year.
        - path: versions[0].formula
          kind: effective_period
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              No deduction shall be allowed under this section for any taxable year beginning after
              December 31, 2028.
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        taxpayer_social_security_number_included_on_return
        and (
            not (filing_status == 1 or filing_status == 2)
            or (filing_status == 1)
        )
        and not taxable_year_begins_after_termination_date

qualified_tips_deduction

Derived

source: 26 USC 224(a), 224(b), 224(e), 224(f), 224(h)

- name: qualified_tips_deduction
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(a), 224(b), 224(e), 224(f), 224(h)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              There shall be allowed as a deduction an amount equal to the qualified tips received
              during the taxable year
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              The amount allowable as a deduction under subsection (a) (after application of
              paragraph (1)) shall be reduced (but not below zero)
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_deduction_before_phaseout
            output: qualified_tips_deduction_before_phaseout
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_phaseout_amount
            output: qualified_tips_phaseout_amount
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_deduction_eligibility
            output: qualified_tips_deduction_eligibility
            hash: sha256:local
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        if qualified_tips_deduction_eligibility:
            max(
                0,
                qualified_tips_deduction_before_phaseout
                - qualified_tips_phaseout_amount
            )
        else:
            0

▸citations (1)

References

This rule cites 1 other rule.

26 USC § 199A (d)(2)inferredUS Federal › Statutes › Title 26 › § 199A › (d)(2)

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us/statute/26/224/d — Qualified tips · Axiom

Qualified tips

Official source

For purposes of this section—

(1) In general

(1)In general#

The term “qualified tips” means cash tips received by an individual in an occupation which customarily and regularly received tips on or before December 31, 2024 , as provided by the Secretary.

(2)Exclusions#

Such term shall not include any amount received by an individual unless—

(A) such amount is paid voluntarily without any consequence in the event of nonpayment, is not the subject of negotiation, and is determined by the payor,

(B) the trade or business in the course of which the individual receives such amount is not a specified service trade or business (as defined in section 199A(d)(2)), and

(3)Cash tips#

in view

Whole section

▸rulespec code

Shown source

statutes/26/224.yaml

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This encoding covers the parent provision us/statute/26/224; no dedicated encoding exists for this exact provision yet.

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Rules

qualified_tips_deduction_cap

Parameter

source: 26 USC 224(b)(1)

- name: qualified_tips_deduction_cap
  kind: parameter
  dtype: Money
  unit: USD
  source: 26 USC 224(b)(1)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: amount
          source:
            corpus_citation_path: us/statute/26/224
            text: >-
              The amount allowed as a deduction under this section for any taxable year shall not
              exceed $25,000.
  versions:
    - effective_from: '2025-01-01'
      formula: '25000'

qualified_tips_phaseout_reduction

Parameter

source: 26 USC 224(b)(2)(A)

- name: qualified_tips_phaseout_reduction
  kind: parameter
  dtype: Money
  unit: USD
  source: 26 USC 224(b)(2)(A)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: amount
          source:
            corpus_citation_path: us/statute/26/224
            text: shall be reduced (but not below zero) by $100 for each $1,000
  versions:
    - effective_from: '2025-01-01'
      formula: '100'

qualified_tips_phaseout_increment

Parameter

source: 26 USC 224(b)(2)(A)

- name: qualified_tips_phaseout_increment
  kind: parameter
  dtype: Money
  unit: USD
  source: 26 USC 224(b)(2)(A)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: amount
          source:
            corpus_citation_path: us/statute/26/224
            text: by $100 for each $1,000 by which the taxpayer’s modified adjusted gross income exceeds
  versions:
    - effective_from: '2025-01-01'
      formula: '1000'

qualified_tips_phaseout_threshold_other

Parameter

source: 26 USC 224(b)(2)(A)

- name: qualified_tips_phaseout_threshold_other
  kind: parameter
  dtype: Money
  unit: USD
  source: 26 USC 224(b)(2)(A)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: amount
          source:
            corpus_citation_path: us/statute/26/224
            text: exceeds $150,000 ($300,000 in the case of a joint return)
  versions:
    - effective_from: '2025-01-01'
      formula: '150000'

qualified_tips_phaseout_threshold_joint

Parameter

source: 26 USC 224(b)(2)(A)

- name: qualified_tips_phaseout_threshold_joint
  kind: parameter
  dtype: Money
  unit: USD
  source: 26 USC 224(b)(2)(A)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: amount
          source:
            corpus_citation_path: us/statute/26/224
            text: $300,000 in the case of a joint return
  versions:
    - effective_from: '2025-01-01'
      formula: '300000'

qualified_tips_modified_adjusted_gross_income

Derived

source: 26 USC 224(b)(2)(B)

- name: qualified_tips_modified_adjusted_gross_income
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(b)(2)(B)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              modified adjusted gross income means the adjusted gross income of the taxpayer for the
              taxable year increased by any amount excluded from gross income under section 911,
              931, or 933
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/911/a#section_911_amount_excluded_from_gross_income
            output: section_911_amount_excluded_from_gross_income
            hash: sha256:b128d251a0f74fc46a27e516e864e53c8d25442f5b419c7bb3bb4b607542d725
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/931#amount_excluded_from_gross_income_under_section_931
            output: amount_excluded_from_gross_income_under_section_931
            hash: sha256:1fa430ea6a413cdaea822ffd05121d78a82954e52929f5a8e48a80c85249c295
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/933#income_excluded_from_gross_income_under_section_933
            output: income_excluded_from_gross_income_under_section_933
            hash: sha256:e9b939801362efae757d1886823555c38a5f4ea828538308fe531f3619adc72f
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        max(
            0,
            adjusted_gross_income
            + section_911_amount_excluded_from_gross_income
            + amount_excluded_from_gross_income_under_section_931
            + income_excluded_from_gross_income_under_section_933
        )

qualified_tips_phaseout_threshold

Derived

source: 26 USC 224(b)(2)(A)

- name: qualified_tips_phaseout_threshold
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(b)(2)(A)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: exceeds $150,000 ($300,000 in the case of a joint return)
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_phaseout_threshold_other
            output: qualified_tips_phaseout_threshold_other
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_phaseout_threshold_joint
            output: qualified_tips_phaseout_threshold_joint
            hash: sha256:local
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        if (filing_status == 1):
            qualified_tips_phaseout_threshold_joint
        else:
            qualified_tips_phaseout_threshold_other

nonemployee_trade_or_business_qualified_tips_taken_into_account

Derived

source: 26 USC 224(c)

- name: nonemployee_trade_or_business_qualified_tips_taken_into_account
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(c)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              such qualified tips shall be taken into account under subsection (a) only to the
              extent that the gross income for the taxpayer from such trade or business for such
              taxable year (including such qualified tips) exceeds the sum of the deductions (other
              than the deduction allowed under this section) allocable to the trade or business
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        min(
            max(0, nonemployee_trade_or_business_qualified_tips_included_on_statements_or_form_4137),
            max(
                0,
                gross_income_from_nonemployee_trade_or_business_including_qualified_tips
                - deductions_allocable_to_nonemployee_trade_or_business_other_than_section_224
            )
        )

qualified_tips_taken_into_account_before_cap

Derived

source: 26 USC 224(a), 224(c)

- name: qualified_tips_taken_into_account_before_cap
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(a), 224(c)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              an amount equal to the qualified tips received during the taxable year that are
              included on statements ... or reported by the taxpayer on Form 4137 (or successor)
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#nonemployee_trade_or_business_qualified_tips_taken_into_account
            output: nonemployee_trade_or_business_qualified_tips_taken_into_account
            hash: sha256:local
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        max(0, employee_qualified_tips_included_on_statements_or_form_4137)
        + nonemployee_trade_or_business_qualified_tips_taken_into_account

qualified_tips_deduction_before_phaseout

Derived

source: 26 USC 224(b)(1)

- name: qualified_tips_deduction_before_phaseout
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(b)(1)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              The amount allowed as a deduction under this section for any taxable year shall not
              exceed $25,000.
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_deduction_cap
            output: qualified_tips_deduction_cap
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_taken_into_account_before_cap
            output: qualified_tips_taken_into_account_before_cap
            hash: sha256:local
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        min(
            qualified_tips_deduction_cap,
            qualified_tips_taken_into_account_before_cap
        )

qualified_tips_phaseout_amount

Derived

source: 26 USC 224(b)(2)(A)

- name: qualified_tips_phaseout_amount
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(b)(2)(A)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              shall be reduced (but not below zero) by $100 for each $1,000 by which the taxpayer’s
              modified adjusted gross income exceeds
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_phaseout_reduction
            output: qualified_tips_phaseout_reduction
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_phaseout_increment
            output: qualified_tips_phaseout_increment
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_modified_adjusted_gross_income
            output: qualified_tips_modified_adjusted_gross_income
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_phaseout_threshold
            output: qualified_tips_phaseout_threshold
            hash: sha256:local
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        floor(
            max(
                0,
                qualified_tips_modified_adjusted_gross_income
                - qualified_tips_phaseout_threshold
            )
            / qualified_tips_phaseout_increment
        )
        * qualified_tips_phaseout_reduction

qualified_tips_deduction_eligibility

Derived

source: 26 USC 224(e), 224(f), 224(h)

- name: qualified_tips_deduction_eligibility
  kind: derived
  entity: TaxUnit
  dtype: Judgment
  period: Year
  source: 26 USC 224(e), 224(f), 224(h)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              No deduction shall be allowed under this section unless the taxpayer includes on the
              return of tax for the taxable year such individual’s social security number.
        - path: versions[0].formula
          kind: condition
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              If the taxpayer is a married individual (within the meaning of section 7703), this
              section shall apply only if the taxpayer and the taxpayer’s spouse file a joint return
              for the taxable year.
        - path: versions[0].formula
          kind: effective_period
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              No deduction shall be allowed under this section for any taxable year beginning after
              December 31, 2028.
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        taxpayer_social_security_number_included_on_return
        and (
            not (filing_status == 1 or filing_status == 2)
            or (filing_status == 1)
        )
        and not taxable_year_begins_after_termination_date

qualified_tips_deduction

Derived

source: 26 USC 224(a), 224(b), 224(e), 224(f), 224(h)

- name: qualified_tips_deduction
  kind: derived
  entity: TaxUnit
  dtype: Money
  period: Year
  unit: USD
  source: 26 USC 224(a), 224(b), 224(e), 224(f), 224(h)
  metadata:
    proof:
      atoms:
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              There shall be allowed as a deduction an amount equal to the qualified tips received
              during the taxable year
        - path: versions[0].formula
          kind: formula
          source:
            corpus_citation_path: us/statute/26/224
            excerpt: qualified tips deduction amount for the taxable year
            text: >-
              The amount allowable as a deduction under subsection (a) (after application of
              paragraph (1)) shall be reduced (but not below zero)
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_deduction_before_phaseout
            output: qualified_tips_deduction_before_phaseout
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_phaseout_amount
            output: qualified_tips_phaseout_amount
            hash: sha256:local
        - path: versions[0].formula
          kind: import
          import:
            target: us:statutes/26/224#qualified_tips_deduction_eligibility
            output: qualified_tips_deduction_eligibility
            hash: sha256:local
  versions:
    - effective_from: '2025-01-01'
      formula: |-
        if qualified_tips_deduction_eligibility:
            max(
                0,
                qualified_tips_deduction_before_phaseout
                - qualified_tips_phaseout_amount
            )
        else:
            0

▸citations (1)

References

This rule cites 1 other rule.

26 USC § 199A (d)(2)inferredUS Federal › Statutes › Title 26 › § 199A › (d)(2)