You might be right on the big picture...I'm not there

Looking at the small picture, I'm assuming there will something like box 65b where you'll declare your total income from tips. Basically incentivizing people to fully to even _over_ report.

Thinking more about this, I think a lot of individuals will attempt to roll "grey economy" stuff into box 65b. Because the IRS has always loves to go after people declaring $8k yearly earnings who bought a new BMW.

In essence the gov't is buying a valuable economic survey with by giving "qualified immunity" on a debt they've rarely ever been able to collect well anyways.

note_bene

econ

Mini Pleb Economist: No Tax on Tips?

SimpleStacker

I don't think you're looking at the big picture, which is that the government is essentially carving out a legally tax-free form of transaction.  My prediction is that workers and businesses are going to squeeze as much of their economic activity into that niche of eligibility as they can.

I'm not sure how enforcement for tax on tips works, but these days most tips are paid electronically, which is probably harder to evade than cash tips which was more common in the 90s.
