by Emmitt Barry, Worthy News Correspondent
(Worthy News) – In a rare show of unanimous support, the U.S. Senate has passed the “No Tax on Tips Act,” a bipartisan measure that would exempt up to $25,000 in reported tip income from federal taxes for employees in customarily tipped occupations such as servers, bartenders, and beauty professionals.
The legislation, championed by Sen. Ted Cruz (R-Texas) and co-sponsored by Sens. Jacky Rosen and Catherine Cortez Masto, both Democrats from Nevada, now heads to the House of Representatives. Lawmakers say the bill would directly benefit an estimated 4 million tipped workers in the U.S.
Under the proposed law, the deduction would apply only to workers earning under $160,000 annually and to tips that are reported to employers for payroll tax withholding. It would cover tips received via cash, card, or check.
“This bill protects the hard-earned income of millions of blue-collar Americans who live paycheck-to-paycheck,” Cruz said, urging the House to quickly advance the legislation to President Donald Trump’s desk.
The proposal echoes one of Trump’s key campaign promises, first announced during a rally in Las Vegas. A broader version of the measure is also embedded in his “One Big Beautiful Bill Act,” a sweeping $4 trillion tax cut and spending overhaul that includes cuts to Medicaid and climate initiatives while boosting border security funding.
Despite wide support, concerns have been raised about pairing the tip tax cut with other controversial provisions. Sen. Rosen urged Congress to pass the bipartisan bill as a standalone measure, warning that “working families shouldn’t have to choose between their health care and their tips.”
Budget experts estimate the bill would cost $110 billion in lost federal revenue over the next decade. Still, proponents argue the relief is overdue for a workforce disproportionately young, low-income, and reliant on gratuities.
Copyright 1999-2025 Worthy News. This article was originally published on Worthy News and was reproduced with permission.
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