The whole no tax on tips is a ruse. I mean just how many tipped employees are paying income taxes on those tips? I would venture more want that tip income counted to increase their EITC. A single mother, two kids, works 40 hours a week at the local diner. She makes $2.13 an hour, plus tips. And she does good, brings in about $600 cash a week. So, if she pays taxes on that it is $4,430.40 in salary a year, $31,200 in tips. Her EITC, for 2022, would have been $4,467. If she only paid taxes on the $4,430 dollars her EITC would be $2.014.