{"id":18185,"date":"2025-07-04T19:56:14","date_gmt":"2025-07-05T02:56:14","guid":{"rendered":"https:\/\/www.probeauty.org\/?p=18185"},"modified":"2025-07-04T19:57:10","modified_gmt":"2025-07-05T02:57:10","slug":"fica-tip-tax-credit-beauty-business-impact","status":"publish","type":"post","link":"https:\/\/www.probeauty.org\/fica-tip-tax-credit-beauty-business-impact\/","title":{"rendered":"The FICA Tip Tax Credit Is Now Law\u2014Here\u2019s What It Means for the Beauty Industry"},"content":{"rendered":"\n<p>After decades of being excluded, salon, spa, and barbershop owners have finally secured long-overdue tax fairness with the passage of the <strong>45B FICA Tip Tax Credit<\/strong>, one of the most significant legislative victories in beauty industry history.<\/p>\n\n\n\n<p>This new law provides employers with a <strong>dollar-for-dollar tax credit on the employer portion of FICA taxes paid on employee tips<\/strong>, correcting a decades-old inequity that has long disadvantaged beauty businesses compared to their counterparts in the restaurant industry.<\/p>\n\n\n\n<p><strong>What is the FICA Tip Tax Credit?<\/strong><\/p>\n\n\n\n<p>In tip-based industries, employees must report tips as taxable income. Employers, in turn, are required to pay the employer\u2019s share of FICA taxes (Social Security and Medicare) on those tips <strong>even though tips are paid directly from the client to the worker<\/strong>.<\/p>\n\n\n\n<p>Since 1993, <strong>restaurant employers have received a tax credit<\/strong> to offset FICA costs. Until now, <strong>beauty industry employers were excluded<\/strong>.<\/p>\n\n\n\n<p>That has officially changed.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What This Means for Your Business<\/strong><\/h3>\n\n\n\n<p>With the 45B FICA Tip Tax Credit now law, salon, spa, and barbershop owners are finally eligible for the same relief.<\/p>\n\n\n\n<p>This credit will:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Offset increased FICA liability from higher reported tips<\/li>\n\n\n\n<li>Free up capital for reinvestment in wages, education, benefits, and growth<\/li>\n\n\n\n<li>Strengthen women- and minority-owned small businesses<\/li>\n\n\n\n<li>Encourage transparent and accurate tip reporting<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Why It Matters<\/strong><\/h3>\n\n\n\n<p>This is more than a tax credit: it\u2019s a statement of value and validation.<\/p>\n\n\n\n<p>The professional beauty industry is made up of more than <strong>1.3 million professionals<\/strong>\u201483% women, 47% people of color, and 98% single-location small business owners. The passage of this legislation reflects the industry\u2019s contributions as <strong>job creators, economic drivers, and community builders<\/strong>.<\/p>\n\n\n\n<p>\u201cThis isn\u2019t just a tax credit\u2014it\u2019s a statement,\u201d said Leslie Perry, Executive Director of the Professional Beauty Association. \u201cIt says our industry matters.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What\u2019s Next?<\/strong><\/h3>\n\n\n\n<p>We know you have questions. That\u2019s why we\u2019re hosting a <strong>Live Q&amp;A on Instagram<\/strong> with:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Leslie Perry<\/strong>, PBA Executive Director<\/li>\n\n\n\n<li><strong>Myra Reddy<\/strong>, PBA Director of Government Affairs<\/li>\n\n\n\n<li><strong>Kati Rapoza<\/strong>, PBA Government Affairs Manager<\/li>\n\n\n\n<li>@probeautyassoc<\/li>\n\n\n\n<li>Tuesday, July 8 @ 1 PM PST\/4 PM EST<\/li>\n<\/ul>\n\n\n\n<p>They\u2019ll break down exactly what this means for your business, what implementation could look like, and what\u2019s next on PBA\u2019s federal policy agenda.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Thank You, PBA Members\u2014and the Advocates Who Made This Possible<\/strong><\/h3>\n\n\n\n<p>This victory was <strong>hard-earned<\/strong> and deeply personal for the PBA team who made it their mission.<\/p>\n\n\n\n<p>For more than a decade, <strong>Myra Reddy and Kati Rapoza<\/strong> have worked side by side to bring tax fairness to the beauty industry. Their leadership, strategy, and relentless commitment through missed family time, late nights, hundreds of meetings, and moments when others said it couldn\u2019t be done made this victory <em>real<\/em>.<\/p>\n\n\n\n<p>They led PBA\u2019s efforts across <strong>multiple sessions of Congress, with three different lobbying firms<\/strong>, building coalitions inside and outside the industry, revising messaging, leading Hill visits, and never backing down.<\/p>\n\n\n\n<p>\u201cWe believed this was a matter of tax fairness and principle,\u201d said Myra. \u201cThis inequity went against what the tax code is meant to do for small businesses. We couldn\u2019t let that stand.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>If You\u2019re a PBA Member: Thank You.<\/strong><\/h3>\n\n\n\n<p>Your support helped fuel this fight\u2014every call, every campaign, every year.<\/p>\n\n\n\n<p>If You\u2019re Not Yet a Member: This is what we do \u2192 <a href=\"https:\/\/www.probeauty.org\/become-a-member\/\">LEARN MORE<\/a><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>After decades of being excluded, salon, spa, and barbershop owners have finally secured long-overdue tax fairness with the passage of&#8230;<\/p>\n","protected":false},"author":15,"featured_media":18186,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[100,62,16],"tags":[107],"insight_type":[80],"class_list":["post-18185","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-advocacy","category-blogs-news","category-government-affairs","tag-government-affairs","insight_type-news-posts"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>FICA Tip Tax Credit Now Law\u2014What That Means | Professional Beauty Association<\/title>\n<meta name=\"description\" content=\"The 45B FICA Tip Tax Credit is now law\u2014delivering long-overdue tax fairness to salon, spa, and barbershop owners. 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