AP English Language FRQ practice

1. Tipping can let customers reward service and help some workers earn more, but it can also make pay unpredictable, shift wage responsibility from employers to customers, and create confusion as tip prompts spread to more settings. Policymakers, businesses, workers, and consumers disagree over whether tips or base wages should matter more.

Carefully read the following six sources, including the introductory information for each source. Write an essay that synthesizes material from at least three of the sources and develops your position on whether service workers should rely less on tips and more on base wages.

Internal Revenue Service. "Treasury, IRS Provide Guidance for Individuals Who Received Tips or Overtime During Tax Year 2025." IR-2025-114, 21 Nov. 2025, www.irs.gov/newsroom/treasury-irs-provide-guidance-for-individuals-who-received-tips-or-overtime-during-tax-year-2025.

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued guidance for workers eligible to claim the deduction for tips and for overtime compensation for tax year 2025.

Notice 2025-69 PDF clarifies for workers how to determine the amount of their deduction without receiving a separate accounting from their employer for cash tips or qualified overtime on information returns such as Form W-2 or Form 1099, as those forms remain unchanged for the current tax year. It also provides transition relief to workers who receive tips in the course of a specified service trade or business.

The IRS is in the process of updating income tax forms and instructions for taxpayers to use this filing season that will assist them in claiming these deductions.

No Tax on Tips

Under the One, Big, Beautiful Bill, workers may be eligible for new deductions for tax years 2025 through 2028 if they received qualified tips. For tipped workers, the maximum annual deduction is $25,000, which phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).

It is estimated that there are about 6 million workers who report tipped wages.

Examples of how the rules work for tipped employees

Today’s guidance provides examples to illustrate various situations tipped employees might encounter; below are abridged versions of some of those examples.

Waiter with reported tips in box 7, Form W-2

Ann is a restaurant server whose 2025 Form W-2, box 7 reports $18,000 of social security tips. Ann did not report any additional tips on Form 4137. Ann may use $18,000 in determining the amount of her qualified tips for tax year 2025.

Bartender with additional reported tips on Form 4137

Bob is a bartender who reports $20,000 in tips to his employer during the 2025 tax year on Forms 4070 and reports $4,000 of unreported tips on Form 4137, line 4. Bob’s 2025 Form W-2 reports $200,000 in box 1 and $15,000 in box 7. Bob may use either the $15,000 in box 7 of the Form W-2, or the $20,000 of tips reported to Bob’s employer on Forms 4070 in determining the amount of qualified tips for tax year 2025. Regardless of the option chosen, Bob may also include the $4,000 of unreported tips from Form 4137, line 4 in determining the amount of qualified tips.

Self-employed travel guide

Doug is a self-employed travel guide who operates as a sole proprietor. In 2025, Doug receives $7,000 in tips from customers paid through a third-party settlement organization (TPSO). For tax year 2025, Doug receives a Form 1099-K from the TPSO showing $55,000 of total payments. The Form 1099-K does not separately identify the tips. However, Doug keeps a log of each tour that shows the date, customer, and tip amount received. Because Doug has daily tip logs substantiating the $7,000 tip amount, he may use the $7,000 tip amount in determining qualified tips for tax year 2025.

Pew Research Center. "Tipping Culture in America: Public Sees a Changed Landscape." Pew Research Center, 9 Nov. 2023, www.pewresearch.org/2023/11/09/tipping-culture-in-america-public-sees-a-changed-landscape/.

Source: Pew Research Center, "Tipping Culture in America: Public Sees a Changed Landscape," Nov. 9, 2023.

Kelly, Kim. "Tipping Is Out of Control. It's Also a Serious Labor Issue." TIME, 3 Apr. 2024, time.com/6962665/tipping-labor-issue-kim-kelly/.

However, tipping culture and all of its attendant discourse is really just a means of obscuring the real issue: The continuing existence of the sub-minimum wage, and the ensuing expectation that consumers (and their tips) will make up the lost wages that employers avoid paying.

For many workers, tips often make up a significant portion of their take-home pay. While some—like servers and bartenders at high-end restaurants, for example—do manage to make good money off tips, someone else always suffers; deprived of that same opportunity, back-of-house kitchen workers like dishwashers and cooks, who are already at a financial disadvantage, fall even further behind. Other workers who rely on tips may find their own earning opportunities restricted by vindictive employers; for example, after dancers at North Hollywood’s Star Garden strip club unionized, their angry boss instituted new rules that made it nearly impossible for them to earn more than a few dollars a night.

. . .

The only people who truly benefit from this custom are those at the top: the people who own the restaurants, hotels, delivery apps, and other businesses, and take home the lion’s share of the profits. Under federal labor law, employers are able to get away with paying tipped workers only $2.13 per hour; if the tips workers receive don’t add up to the hourly federal minimum wage of $7.25, their bosses are required to make up the difference. Unfortunately, this does not always happen. In 2017, the Economic Policy Institute found that workers in the 10most populous states were robbed of more than $8 billion annually thanks to minimum wage violations, and the issue’s only getting worse. In 2023 alone, the Department of Labor’s Wages and Hours Division recovered over $29 million in back wages and damages for restaurant workers.

It’s not just about the money, either. The practice of tipping in the U.S. is deeply rooted in racism, sexism, and ableism. As civil rights advocate and author of The New Jim Crow , Michelle Alexander wrote in a 2021 New York Times op-ed, “A nation that once enslaved Black people and declared them legally three-fifths of a person now pays many of their descendants less than a third of the minimum wage to which everyone else is entitled.”

Alexander also noted that the tipped workforce, which skews 70% female, is disproportionately made up of Black and brown women . This is no coincidence. When President Franklin D. Roosevelt signed the Fair Labor Standards Act of 1938 into law, it established the nation’s first minimum wage , but conspicuously excluded several classes of workers—including domestic workers, agricultural workers, and restaurant workers—who at that time in history were predominantly Black. Racist employers who resented being told to pay their Black workers properly began encouraging customers to tip them instead as a means of control.Then as now, tipped workers are obligated to accept bad behavior from customers and perform extra emotional labor in order to avoid being financially penalized.

Tarakanova, Yana. "Opinion: Initiative 82 Was Supposed to Help D.C.'s Tipped Workers. It Did the Opposite." The 51st, 23 July 2026, 51st.news/opinion-initiative-82-was-supposed-to-help-d-c-s-tipped-workers-it-did-the-opposite/.

As a professional server with over a decade of experience, I’m passionate about my job and committed to standing up for my fellow tipped workers. I chose this career path because I love everything about food and making people happy. Until recently, it’s been a career that offered great flexibility and compensation that allowed me to support my family in the expensive D.C. area. Initiative 82 put that all at risk, and I truly want the D.C. Council to follow Mayor Muriel Bowser’s lead to repeal it.

I emphasize the word “professional” in professional server. When the D.C. restaurant scene was thriving, I was constantly educating myself on current food and beverage trends to be a qualified and highly sought-after employee. Success requires effort and investment, but the return was worth it. Servers at full-service restaurants reported earning a median of $27 per hour in one survey from the National Restaurant Association . The highest paid workers reported making over $40. In D.C. it was even better – tipped workers, including their support staff, used to have an opportunity to make extra during peak seasons. In my experience, servers and bartenders could earn $50-60 an hour during peak times, and around $40 an hour on steady shifts. But those days are now gone.

Since Initiative 82 began to take effect, my work has been cut by up to 10 hours a week. Newly implemented service fees at the restaurant where I work – many restaurants have implemented similar fees in order to avoid financial disaster – have decreased my average tip percentage from 23-25% to 18-20%. Customers are simply not willing to tip more than that when they’re already paying an additional 5% fee. And who can blame them?

Initiative 82 is a confusing and misleading measure. Passed by voters in 2022, it eliminated the tipped wage over several years and mandated that tipped workers be paid the full minimum wage in addition to their tips. Before this, if a tipped worker didn’t make the full minimum wage once their tips were accounted for, their employer made up the difference. In other words, Initiative 82 sought to fix a problem that didn’t exist—D.C.’s tipped workers were already making far above minimum wage and were protected by law.

Voters likely thought they were helping tipped workers by allowing them to get a higher hourly wage in addition to tips. But that’s not the case. When Initiative 82 went into effect in 2023, it had a dire impact on the District’s restaurant industry. Nearly 70% of full-service restaurants reported lower profitability in a 2024 survey conducted by the Restaurant Association of Metropolitan Washington (which has advocated against I-82). Last year, more than 70 restaurants closed .

All of that, and Initiative 82 hasn’t even gone into full effect yet—the tipped workers' wage has only been increased to $10 an hour so far. Things will get even worse if the initiative continues and the tipped worker hourly wage is increased by $2 an hour every year until it catches up with the standard minimum wage in 2027.

. . .

I’d like to thank Mayor Bowser for her plan to include a measure to repeal Initiative 82 as part of her 2026 budget. I encourage the D.C. Council to vote yes on this measure. The change can’t come soon enough!

U.S. Department of Labor, Wage and Hour Division. "Minimum Wages for Tipped Employees." Effective 1 July 2026, www.dol.gov/agencies/whd/state/minimum-wage/tipped.

Source: U.S. Department of Labor, Wage and Hour Division, Minimum Wages for Tipped Employees, effective July 1, 2026.

Employment Policies Institute. "DC Restaurant Closures Down 43% Following Initiative 82 Change." EPI, 10 July 2026, epionline.org/blog-post/dc-restaurant-closures-down-43-following-initiative-82-change/.

Washington D.C.’s restaurant industry may finally be seeing a small reprieve after years of disruption caused by Initiative 82.

The Restaurant Association of Metropolitan Washington recently reported that restaurant closures have declined by 43% following the D.C. City Council’s decision to pause the remaining increases required under Initiative 82. While the improvement is encouraging, the city’s restaurant industry isn’t out of the woods just yet.

Initiative 82, approved by voters in 2022, was planned to eliminate the city’s tip credit by 2027. Restaurant owners warned the policy would increase labor costs, force menu price increases, reduce staffing, and ultimately make it more difficult for restaurants to survive.

Those concerns quickly materialized.

The city saw the number of restaurants closing year after year grow larger. This time last year, RAMW reported restaurant closures were up 39% over the previous year. Workers suffered too. Full-service restaurants and bars lost approximately 5% of their jobs. Workers who remained employed also saw their earnings decline, with Census Bureau data showing average weekly pay, including tips, fell by 5% in the two years following Initiative 82.

As the impacts became increasingly difficult to ignore, the D.C. City Council voted to halt Initiative 82 in July 2025, preserving the tip credit instead of allowing it to be fully eliminated.

The recent slowdown of restaurant closures following the City Council’s action isn’t shocking.

Research consistently finds that higher mandated wages make it increasingly difficult for restaurants to absorb rising labor costs. As Initiative 82 was reducing the size of the tip credit toward full elimination, the effective base wage paid by restaurants was getting higher and higher.

In a recent EPI survey of economists, most say steep wage hikes of any kind make it harder to stay in business. 69% said minimum wages above $15 make it more difficult for businesses to stay open. That share rose to 94% for minimum wages approaching $20 per hour and 98% for wages exceeding $20. More than three-quarters also say eliminating the tip credit will lead to fewer full-service restaurant jobs.

Those concerns are especially relevant as advocates push Initiative 87, which would raise D.C.’s minimum wage to $25 per hour by 2029.

The recent slowdown in restaurant closures is welcome news, but it should not be mistaken for a full recovery. D.C.’s restaurant industry continues to operate under significant cost pressures, and policymakers should carefully consider the lessons of Initiative 82 before imposing even higher labor mandates. With another major minimum wage increase already in effect and a $25 minimum wage proposal on the horizon, the District’s restaurants, and the workers who depend on them, remain in a precarious position.