Tax Brief Issue 2: New Tip Deduction, Reporting Thresholds, & EV Charger Credit Updates

This week brings significant updates for CPAs, including a new deduction for qualified tips, increased information reporting thresholds, and clarifications for electric vehicle charging property credits. These changes impact various taxpayer scenarios and require careful attention for accurate tax planning and compliance.

01. IRB 2026-18 (Rev. 04-27-2026)

• The deduction for qualified tips under new IRC Section 224 is capped at $25,000 per taxable year, regardless of filing status, and phases out for modified adjusted gross incomes above $150,000 ($300,000 for joint filers).
• To claim the Section 224 deduction for qualified tips, married individuals must file a joint return, and the deduction is not available for any taxable year beginning after December 31, 2028.

Source: IRS Internal Revenue Bulletin · 2026-04-27

02. IRB 2026-19 (Rev. 05-04-2026)

• The information reporting threshold under sections 6041, 6041A, and 3406 increases from $600 to $2,000 for payments made on or after January 1, 2026, with inflation adjustments for calendar years after 2026.
• The deduction for wagering losses under Section 165(d) is limited to 90% of the losses (up to the extent of gains) for taxable years beginning after December 31, 2025.

Source: IRS Internal Revenue Bulletin · 2026-05-04

03. Publication 6027 (Rev. 6-2026)

• The Alternative Fuel Vehicle Refueling Property Credit (§30C) for individuals applies to eligible property placed in service only through June 30, 2026.
• To qualify for the §30C credit, an individual's electric vehicle charger must be installed in an eligible low-income community or non-urban census tract, and for installations prior to January 1, 2025, taxpayers may use either 2015 or 2020 census tract boundaries to determine eligibility.

Source: IRS Tax Forms and Instructions · 2026-05-01