Casino workers, specifically slot machine attendants, were overlooked in Donald Trump's exemption from paying taxes on tips.
In a move that has raised questions about its potential impact on the overall tax revenue of the federal government, the tax exemption for tip earnings, a fulfillment of Donald Trump's campaign promise, was included in the "Big, Beautiful, Bill" that passed in July 2021. The exemption applies to a list of 68 jobs in the hospitality industry, but notably, slot machine attendants, who assist players with questions about slot machines, handle minor issues, verify bigger payouts, and ensure a smooth customer experience, were not included.
This means that slot machine attendants, who often rely heavily on tips, especially when a customer has a big win, will continue to be taxed on their tip earnings. Approximately 4 million Americans currently work in jobs where they earn tips, and for these individuals, the exemption covers all relevant income from the start of 2021 until 2028. However, it is important to note that this exemption only applies to federal taxes, and no information has been provided regarding state or local taxes for tip earnings.
The tax exemption may have implications for the overall tax revenue of the federal government, considering the addition of a new occupation like slot machine attendants. The potential impact on the economy or employment in the slot machine attendant sector, or in the hospitality industry as a whole, remains unclear.
It is worth noting that eligible people in the hospitality industry are exempt from paying federal taxes on their first $25,000 of tip earnings. Additionally, the exemption does not affect the reporting of tip income for tax purposes, whether for individuals in the hospitality industry or for slot machine attendants.
Despite the exclusion of slot machine attendants from the tax exemption list, the government has made it clear that the reporting of tip income for tax purposes remains mandatory for this occupation. This means that while the tax burden remains for slot machine attendants, they are still required to accurately report their tip earnings for tax purposes.
In conclusion, while the tax exemption for tip earnings has been welcomed by many in the hospitality industry, the exclusion of slot machine attendants from the list of eligible jobs has left this group of workers still taxable on their tip earnings. The potential impact on the overall tax revenue of the federal government, the economy, and employment in the slot machine attendant sector remains uncertain.
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