No Tax on Tips: Why Your Withholding Hasn’t Changed

In the video below, Chris Wittich walks through the recent no tax on tips law passed in summer 2025. While many salon professionals will benefit, payroll withholding didn’t automatically change, so most people will see the impact as a refund when they file their tax return.

Chris explains that if you’d rather see this benefit reflected in each paycheck, you’ll need to submit an updated W-4 to your employer. Specifically, you’ll enter your estimated qualified tip income on Line 4(b) of the form.

To take action, simply download the W-4, complete it, and return it to your employer (paper or electronic, depending on your payroll system).

Watch the No Tax on Tips video.