
Millions of tipped workers are still seeing income tax withheld on their tips, even though a recent federal law changed how tip income is taxed, according to the IRS.
For many workers, this means they may no longer owe federal income tax on a portion of their tips, even if money was taken out of their paychecks as usual. The good news is that overpaid taxes are not lost. Here’s how to reclaim overpayments on tips today.