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What Is The FICA Tax Tip Credit?

In 1993 Congress passed the 45B FICA tax tip credit allowing restaurants to claim a dollar-for-dollar tax tip credit on the employer portion of FICA taxes that businesses pay on tips that employees receive directly from their customers.

As the second-highest tipped industry, beauty employers should receive parity with the restaurant employers in the tax code, but presently do not. Extending access to the credit would create a fair and equitable application, keeping capital in our businesses and benefitting the entire industry.

See details on H.R.45 and S.45

Who this affects

Hair salons, barbershops, spas, and other beauty service establishments owners are mostly comprised of middle class women and minorities, employing more than 2x the national average.

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14% African Americans

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23% Asians

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83% Women

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60% women-owned salons

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Alliance for
Tax Equity

  • International Franchise Association
  • National Association of Barber Boards of America
  • National Association of Women Business Owners
  • National Interstate Council of State Boards
  • Personal Care Products Council
  • Professional Beauty Association
  • Professional Beauty Employment Coalition
  • The Esthetics Council
  • Associated Skin Care Professionals
  • Associated Hair Professionals
  • Associated Nail Professionals
  • Intercoiffure America Canada
  • International Salon Spa Business Network
  • International Spa Association
  • Cosmetologists Chicago

Bill Sponsors

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