republic-os/legal/us/code/title-26/chapter-1/section-45b.md

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LegalText	26 U.S.C. § 45B	Credit for portion of employer social security taxes paid with respect to employee cash tips	us	united_states_code	code_section	26	INTERNAL REVENUE CODE	1	NORMAL TAXES AND SURTAXES	45B	26 U.S.C. § 45B	current	119-100	2026-06-26	official	https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc26@119-100.zip	/us/usc/t26/s45B	data/legal/raw/us/code/title-26/usc26.xml	2348805b27b1c0f68f4b14b24c8ab80af08338427d06440226c2f5bff429c937	a261f094809116f42a96648a3d5eee80fa010379d67412551c21dd5c900b27f4	97c3ccfd3406dee63801962f45e2610968f401ca54da6e41d3bcc69f81f3c003	2026-07-04	official	legal us-code

26 U.S.C. § 45B - Credit for portion of employer social security taxes paid with respect to employee cash tips

Text

(a) General rule For purposes of section 38, the employer social security credit determined under this section for the taxable year is an amount equal to the excess employer social security tax paid or incurred by the taxpayer during the taxable year.

(b) Excess employer social security tax For purposes of this section—

(1) In general The term “excess employer social security tax” means any tax paid by an employer under section 3111 with respect to tips received by an employee during any month, to the extent such tips—

(A) are deemed to have been paid by the employer to the employee pursuant to section 3121(q) (without regard to whether such tips are reported under section 6053), and

(B) exceed the amount by which the wages (excluding tips) paid by the employer to the employee during such month are less than the total amount which would be payable (with respect to such employment) at the minimum wage rate applicable to such individual under section 6(a)(1) of the Fair Labor Standards Act of 1938 (determined without regard to section 3(m) of such Act, and in the case of food or beverage establishments, as in effect on January 1, 2007).

(2) Application only to certain lines of business In applying paragraph (1) there shall be taken into account only tips received from customers or clients in connection with the following services:

(A) The providing, delivering, or serving of food or beverages for consumption, if the tipping of employees delivering or serving food or beverages by customers is customary.

(B) The providing of any of the following services to a customer or client if the tipping of employees providing such services is customary:

(i) Barbering and hair care.

(ii) Nail care.

(iii) Esthetics.

(iv) Body and spa treatments.

(c) Denial of double benefit No deduction shall be allowed under this chapter for any amount taken into account in determining the credit under this section.

(d) Election not to claim credit This section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year.

(Added Pub. L. 103–66, title XIII, § 13443(a), Aug. 10, 1993, 107 Stat. 568; amended Pub. L. 104–188, title I, § 1112(a)(1), (b)(1), Aug. 20, 1996, 110 Stat. 1759; Pub. L. 110–28, title VIII, § 8213(a), May 25, 2007, 121 Stat. 193; Pub. L. 119–21, title VII, § 70201(e), July 4, 2025, 139 Stat. 171.)

Notes

Editorial Notes

References in TextSections 3(m) and 6(a)(1) of the Fair Labor Standards Act of 1938, referred to in subsec. (b)(1)(B), are classified to sections 203(m) and 206(a)(1), respectively, of Title 29, Labor.

Amendments2025—Subsec. (b)(1)(B). Pub. L. 119–21, § 70201(e)(2), struck out “as in effect on January 1, 2007, and” before “determined without regard to” and inserted “, and in the case of food or beverage establishments, as in effect on January 1, 2007” after “without regard to section 3(m) of such Act”. Subsec. (b)(2). Pub. L. 119–21, § 70201(e)(1), amended par. (2) generally. Prior to amendment, text read as follows: “In applying paragraph (1), there shall be taken into account only tips received from customers in connection with the providing, delivering, or serving of food or beverages for consumption if the tipping of employees delivering or serving food or beverages by customers is customary.” 2007—Subsec. (b)(1)(B). Pub. L. 110–28 inserted “as in effect on January 1, 2007, and” before “determined without regard to”. 1996—Subsec. (b)(1)(A). Pub. L. 104–188, § 1112(a)(1), inserted “(without regard to whether such tips are reported under section 6053)” after “section 3121(q)”. Subsec. (b)(2). Pub. L. 104–188, § 1112(b)(1), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Only tips received at food and beverage establishments taken into account.—In applying paragraph (1), there shall be taken into account only tips received from customers in connection with the provision of food or beverages for consumption on the premises of an establishment with respect to which the tipping of employees serving food or beverages by customers is customary.”

Statutory Notes and Related Subsidiaries

Effective Date of 2025 AmendmentPub. L. 119–21, title VII, § 70201(j), July 4, 2025, 139 Stat. 173, provided that: “The amendments made by this section [enacting section 224 of this title, amending this section and sections 63, 199A, 6041, 6041A, 6050W, 6051, and 6213 of this title, and renumbering former section 224 of this title as section 225] shall apply to taxable years beginning after December 31, 2024.”

Effective Date of 2007 AmendmentPub. L. 110–28, title VIII, § 8213(b), May 25, 2007, 121 Stat. 193, provided that: “The amendment made by this section [amending this section] shall apply to tips received for services performed after December 31, 2006.”

Effective Date of 1996 AmendmentPub. L. 104–188, title I, § 1112(a)(3), Aug. 20, 1996, 110 Stat. 1759, provided that: “The amendments made by this subsection [amending this section and provisions set out as a note under section 38 of this title] shall take effect as if included in the amendments made by, and the provisions of, section 13443 of the Revenue Reconciliation Act of 1993 [Pub. L. 103–66].” Pub. L. 104–188, title I, § 1112(b)(2), Aug. 20, 1996, 110 Stat. 1759, provided that: “The amendment made by paragraph (1) [amending this section] shall apply to tips received for services performed after December 31, 1996.”

Effective DateSection applicable with respect to taxes paid after Dec. 31, 1993, with respect to services performed before, on, or after such date, see section 13443(d) of Pub. L. 103–66, as amended, set out as an Effective Date of 1993 Amendment note under section 38 of this title.