Lawmakers took a giant leap forward in eliminating taxes on tips.
The Senate on Tuesday unanimously passed the “No Tax on Tips Act” put forth by Sen. Ted Cruz (R-Texas), per The Daily Wire.
“President [Donald] Trump made a promise to the American people that he would eliminate taxes on tips. In Congress, I formed a bipartisan, bicameral coalition to get that done, and in the Senate introduced the No Tax on Tips Act,” Cruz said.
“Today, I went with Senator [Jacky] Rosen [(D-Nev.)] to the floor to secure Senate passage of the bill,” the lawmaker continued. “This legislation will have a lasting impact on millions of Americans by protecting the hard-earned dollars of blue-collar workers, the very people who are living paycheck-to-paycheck. I urge my colleagues in the House to pass this important bill and send it to the President’s desk to be signed into law.”
A summary on Congress.gov explained the bill, which “establishes a new tax deduction of up to $25,000 for tips” as long as the worker earned less than $160,000 for 2025.
“The bill also expands the business tax credit for the portion of payroll taxes an employer pays on certain tips to include payroll taxes paid on tips received in connection with certain beauty services,” the summary explained.
The legislation now heads to the House.
