To amend the Internal Revenue Code of 1986 to provide that tips received for certain services shall not be subject to income or employment taxes.

H.R. 1274 proposes to exempt a portion of tip income from federal income and employment taxes for workers in specific service industries. Under this bill, tips received for services such as serving food and beverages or providing personal care would be legally treated as gifts rather than taxable wages, up to a certain limit. For eligible employees, this change would increase their take-home pay by reducing the amount of tax withheld from their gratuities.