Senate Unanimously Passes ‘No Tax On Tips’ Bill — What It Could Mean For Trump’s Tax Bill
The Senate unanimously passed the “No Tax on Tips Act” on Tuesday, which would eliminate federal income tax on “cash tips” — including those given via cash, credit/debit card, or check.
The bill now heads to the House, where GOP lawmakers could choose to remove a similar measure to eliminate taxes on tips from their broader tax package, known as the “One Big Beautiful Bill Act” — which is still struggling Wednesday to get enough GOP support to pass before the Memorial Day break.
COME TOGETHER
The bipartisan support for the no tax on tips legislation, which advances one of President Trump’s key campaign promises, is rare.
Sen. Jacky Rosen (D-NV) brought the bill to the floor Tuesday. Roughly 25% of workers in her home state rely on tips.
“No taxes on tips was one of President Trump’s key promises to the American people. And I am not afraid to embrace a good idea wherever it comes from,” Rosen said.
The bill applies to workers in industries where tipping is customary — such as waiters, bartenders, and delivery drivers — and would allow a 100% tax deduction on tips up to $25,000 per tax year.
Employees who earned $160,000 or more in the prior tax year would not be eligible to claim the deduction.
Yale’s Budget Lab estimates that move would affect around 4 million workers. Some critics say the policy is inherently unfair — for example, it would benefit a waitress making $75,000 a year, but not a teacher earning the same amount. Others take issue with tipping more broadly, arguing that it places the burden on consumers to provide workers a living wage instead of requiring companies to do so.
UP NEXT
The bill now heads to the House, where GOP lawmakers could now cut the taxes on tips measure from their broader tax package. Doing so could lower the overall cost of that legislation, which currently sits around $3.8 trillion over the next decade driven by tax breaks and defense spending.
Unlike the tips legislation in the Senate, Trump’s “big, beautiful bill” currently has no Democratic support in the House.
