Tip Income Definition
Tip income is tips received directly from customers. This can include cash tips or tips charged to a debit or credit card.
Tip Income Extended Definition
Employees must report all of their tip income to their employer. The employer is then responsible for withholding federal, state, and local taxes from the tip income.
Tip income does not include service charges, like bottle service charges or large party charges.
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Last Updated By
Rachel Blakely-Gray | May 01, 2023