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New IRS rule changes the way waiters are tipped

10:02 PM, Jan 1, 2014   |    comments
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JACKSONVILLE, Fla. -- With the New Year, brings a change to the way restaurant workers take home their tips. The new policy enacted by the Internal Revenue Service will hit tipped employees where it hurts the most- their wallets.

Under the new policy, the IRS changed the way waiters get some of the tips you leave at the table after your meal. Starting this year, automatic gratuity tips are taxable service charges and restaurant workers will not pocket the money at the end of their shifts; instead, they have to wait until payday. Employers must also comply with the new policy and that means, withholding social security, Medicare taxes and Federal Income on that money.

Calen Hunter, Manager of American Grill says this change comes at a time when the restaurant business slows down.

Hunter says, "This definitely comes at a bad time because right now we are rolling into our slow season, so any tips that anyone can get in right now, is basically what they are living on. We are going to bare bones right now until spring starts again."

A waiter at the same restaurant says the change will affect his budget.

"There is definitely ways that it affects me personally, but I think for the long-term and for the well-being of the country, it really is a small price to pay," said Jospeh Manuola.

First Coast News

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