Senate Passes “No Tax on Tips Act” Backed by Cruz and Trump
In a unanimous 100–0 vote, the U.S. Senate passed the “No Tax on Tips Act,” a key campaign promise of former President Donald Trump. Introduced by Senator Ted Cruz (R-TX), the bill exempts tipped income—including cash, credit, and debit tips—from federal income taxes. It aims to support millions of blue-collar workers and includes “guardrails” to ensure only tipped employees benefit.
The legislation allows a full deduction of tips from 2025 to 2028, regardless of whether taxpayers itemize. The Senate version caps the deduction at $25,000 and begins phasing it out at incomes above $150,000 ($300,000 for couples).
The bill is now in the GOP-led House. A similar version passed there in May. If approved, it will go to Trump for signature.
Cruz, who collaborated with Democrat Jackie Rosen on the bill, called it a major win for working Americans. Prominent Democrats have also voiced support, signaling rare bipartisan backing for a tax reform aimed at tipped workers.
