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yesterday

Senate Unanimously Approves 'No Tax on Tips' Act, Sending Bill to the House

The bipartisan legislation, fulfilling a key Trump campaign promise, offers a $25,000 tax deduction for tipped workers earning under $160,000 annually.

A tip jar at a coffee shop in the Union Market district in Washington, DC, US, on Friday, Sept. 8, 2023. US employment gains will slow significantly and be more concentrated across few sectors in the decade through 2032 as population growth moderates, fresh government estimates show. Photographer: Al Drago/Bloomberg
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Overview

  • The Senate passed the 'No Tax on Tips Act' by unanimous consent on May 20, 2025, marking rare bipartisan agreement on a substantive policy change.
  • The bill, introduced by Sen. Ted Cruz and co-sponsored by Sens. Jacky Rosen and Catherine Cortez Masto, allows tipped workers to deduct up to $25,000 in reported tips from federal income taxes.
  • Eligibility for the deduction is capped at workers earning $160,000 or less annually, with adjustments for inflation in future years.
  • The legislation now advances to the House, where it could be passed as a standalone bill or included in a broader Republican-led spending and tax package.
  • Nevada, with the highest concentration of tipped workers, played a key role in shaping the bill, which aims to provide immediate financial relief to service industry employees.