Tips are absolutely taxable income and are required to be reported: https://www.irs.gov/newsroom/tip-income-is-taxable-and-must-...

Which is why your server wants you to tip in cash, because then there's no official record of the tip.

P.S. to tipped employees, paying taxes sucks, but cheating yourself out of SS credits by not paying your taxes sucks more in the long term. Especially if you wind up with some disability in early adulthood that limits your work capabilities. You want your pay history with the social security administration to be as long and as high as it can be, so bite the bullet and pay your taxes on your tips too.

>Which is why your server wants you to tip in cash, because then there's no official record of the tip.

That theoretically makes sense, but I've never actually seen that. If I'm paying with card, it's almost always added to the total bill, so there's always a record.

Right, if you put your tip on your card (or the restaurant adds it automatically), that's going to have a record because it's not in cash. The restaurant owners want this because having the records of tips means they don't have to pay more than the tipped minimum wage if your tips + the base rate >= standard minimum wage. They want to be able to prove to the government you got your full minimum wage, so they want you to use a card for tipping.

Your server probably still prefers you to leave the line blank and tip in cash though.