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Treasury Regulations · 26 CFR

§ 31.3401(a)(16)-1. Tips.

In effect eCFR current as of October 15, 2026

Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).

Regulation under 26 U.S.C. § 3401(a)(16)

Cite as 26 CFR § 31.3401(a)(16)-1

At a glance

Read from the text and its source citation. Not part of the regulation.

Status
In the current eCFR
Issued
January 23, 1969 by T.D. 7001
Issued under
26 U.S.C. § 3401(a)(16)
Length
249 words · about 1 min to read
Cross-references
cites 0 Code sections and 2 regulations; cited by 3

Tips paid to an employee are excepted from wages and hence not subject to withholding if—

(a) The tips are paid in any medium other than cash, or
(b) The cash tips received by an employee in any calendar month in the course of his employment by an employer are less than $20.

However, if the cash tips received by an employee in a calendar month in the course of his employment by an employer amount to $20 or more, none of the cash tips received by the employee in such calendar month are excepted from wages under this section. The cash tips to which this section applies include checks and other monetary media of exchange. Tips received by an employee in any medium other than cash, such as passes, tickets, or other goods or commodities do not constitute wages. If an employee in any calendar month performs services for two or more employers and receives tips in the course of his employment by each employer, the $20 test is to be applied separately with respect to the cash tips received by the employee in respect of his services for each employer and not to the total cash tips received by the employee during the month. As to the time tips are deemed paid, see § 31.3401(f)-1. For provisions relating to the treatment of tips received by an employee prior to 1966, see paragraph (b)(11) of § 31.3401(a)-1.

[T.D. 7001, 34 FR 1001, Jan. 23, 1969]

Other regulations under § 3401

Cross-references

Computed from the citations in the text of 26 CFR.

Regulations it cites

Cited by 3 other regulations

Amendment history

From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.

  1. Issued by T.D. 7001 (34 FR 1001)

Where it sits in 26 CFR

  1. Subchapter C Employment taxes and collection of income tax at source
  2. Part 31 Employment taxes and collection of income tax at source
  3. Subpart E Collection of Income Tax at Source

Nearby sections