The proposal establishes a new tax deduction of up to $25,000 for cash tips.
By Catholics for Catholics
In a move that puts workers closer to avoid getting their tips taxed, lawmakers in the Republican-led Senate passed a proposal Tuesday that would eliminate federal taxes on tips, according to NTD.
The move was a campaign promised by President Donald Trump. The proposal has drawn support from Republicans and Democrats.
According to NTD, the measure forms a new tax deduction of up to $25,000 for tips—whether received in cash, by credit or debit card, or by check—that are earned by employees in jobs that routinely receive tips and are reported to their employers for reasons of withholding payroll taxes.
The Senate passed the bipartisan “No Tax on Tips Act” in a unanimous vote, sending the legislation to the House of Representatives.
Senator Ted Cruz (R-Texas) introduced the measure. It was also sponsored by a bipartisan group of senators including Jacky Rosen and Catherine Cortez Masto, both Democrats from Nevada.
Cruz said after the vote that the bill 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.”
The Republican from Texas asked his colleagues in the House to pass the legislation and send it to Trump’s desk to be signed into law.
For now, an employee is required to report tips exceeding $20 per month to their employer. The bill does not apply to employees making more than $160,000 in 2025, a figure that will be adjusted annually to account for inflation, according to the bill.
Your action is key to winning the next Presidential Election.
