2025 Tip Tax Credit for Beauty Service Businesses
Beginning with tax year 2025, the Federal Insurance Contributions Act (FICA) Tip Credit of has been extended to the beauty industry. This tip credit applies to the "employer's" share of the Social Security and Medicare taxes paid on an employee's cash and charged tips which is 7.65%.
Besides certain food and beverage businesses, "beauty services" which include barbering and hair care, nail care, esthetics, body and spa treatments are now eligible for the tax credit.
