Rep. Tran Backs TIPS Act to Make Tax Deduction on Tips Permanent for Service Workers

Bill would raise the deduction cap from $25,000 to $112,500 and benefit nearly 70,000 service industry professionals in California’s 45th District

WASHINGTON, D.C. – RealEstateRama – U.S. Representative Derek Tran (CA-45) has signed on as a co-sponsor of H.R. 1314, the Tipped Income Protection and Support Act (TIPS Act), which would let service industry professionals deduct their tips when filing taxes. The bill would raise the maximum adjusted gross income at which service workers can claim the deduction from $25,000 to $112,500 and make the change permanent nationwide.

“While prices skyrocket due to President Trump’s reckless war in Iran and irresponsible tariff policies, working families are under an immense amount of stress as they struggle to make ends meet. For service workers, tips are essential to putting food on the table, handling everyday expenses, and providing for their loved ones. I’m a proud cosponsor of the TIPS Act because it creates a measurable economic impact for service workers and their families in Southern California — putting more money in their pockets and strengthening their financial futures,” said Representative Tran.

Who would benefit

The TIPS Act covers workers in cosmetology, hospitality, food and beverage, parking, and custodial services. Nearly 70,000 service industry professionals in California’s 45th Congressional District would benefit.

Representative Steven Horsford (NV-04) introduced the bill in the 119th Congress. It differs from the tip deduction in H.R. 1, the so-called “One Big Beautiful Bill Act,” which expires at the end of 2028. The TIPS Act would make the higher deduction permanent.

Tran’s other affordability efforts

Representative Tran has continued to push legislation aimed at lowering costs for working families:

• May 2026: Joined fellow members of the Lowering Costs Caucus in a letter urging the Trump Administration to address skyrocketing energy prices.
• July 2025: Introduced the Baby Food Tax Relief Act, which would exempt essential baby feeding products, such as formula, high chairs, and baby bottles, from tariffs.
• Also cosponsored: The Affordable Housing Credit Improvement Act, which would finance construction of more multifamily housing, and the First-Time Homebuyer Tax Credit Act, which would create a refundable tax credit for first-time homebuyers.