Restaurant Service Charge Fairness Act

This bill amends tax rules to allow restaurants to claim a payroll tax credit for service charges paid to non-management employees, similar to existing rules for tips. It specifically permits employers to count service charges that meet two conditions: (1) they're treated as wages for non-management staff, and (2) they cover the gap between actual pay and the minimum wage. Employers must choose between claiming the credit for tips or service charges (not both), and only service charges up to 25% of the restaurant’s gross receipts can be used for the credit. The changes apply to tax years starting after December 31, 2024.