<p>On Tuesday, the GOP-led Senate unanimously passed bipartisan legislation from Sen. Ted Cruz (R-TX) that seeks to make good on President Donald Trump&#8217;s campaign promise for getting rid of taxes on tips.</p>
<p>Axios <a href="https://www.axios.com/2025/05/20/senate-dems-attempt-pass-no-tax-on-tips" target="_blank" rel="noopener">reported</a> earlier in the day that Senate Republicans were likely to block a request for unanimous consent for Cruz&#8217;s measure by Sen. Jacky Rosen (D-NV) because the GOP-controlled House is working on Trump&#8217;s &#8220;one big, beautiful bill,&#8221; which has its own <a href="https://www.dailywire.com/news/trumps-one-big-beautiful-bill-gets-no-tax-on-tips-and-overtime" target="_blank" rel="noopener">&#8220;No Tax On Tips&#8221;</a> component.</p>
<p>However, that opposition did not materialize and Cruz&#8217;s <a href="https://www.cruz.senate.gov/imo/media/doc/no_tax_on_tips_act_2025.pdf" target="_blank" rel="noopener">&#8220;No Tax on Tips Act&#8221;</a> passed by <a href="https://x.com/SenatePress/status/1924921893066277222" target="_blank" rel="noopener">unanimous consent</a>, which is an <a href="https://www.senate.gov/about/glossary.htm" target="_blank" rel="noopener">agreement</a> that allows the upper chamber to bypass standard rules to speed up proceedings.</p>
<p>&#8220;President 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,&#8221; Cruz said in a <a href="https://www.cruz.senate.gov/newsroom/press-releases/sen-cruzs-no-tax-on-tips-legislation-passes-senate" target="_blank" rel="noopener">statement</a>.</p>
<p>&#8220;Today, I went with Senator Rosen to the floor to secure Senate passage of the bill,&#8221; he added. &#8220;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.&#8221;</p>
<p>According to a Congress.gov <a href="https://www.congress.gov/bill/119th-congress/senate-bill/129" target="_blank" rel="noopener">summary</a>, the bill, as introduced, allows workers in tip-heavy jobs to deduct up to $25,000 in reported cash tips from their taxes unless they earned over a threshold, which is $160,000 for 2025 and adjusted annually for inflation. It also expands business tax credits to cover payroll taxes on tips from beauty services such as haircare and spa treatments.</p>
<p>Cruz&#8217;s office says the bill &#8220;exempts &#8216;cash tips&#8217; — cash, credit and debit card charges, and checks — from federal income tax by allowing taxpayers to claim a 100% deduction at filing for tipped wages. The updated text includes guardrails to ensure only traditionally tipped employees will benefit from No Tax on Tips.&#8221;</p>
<p>The legislation now heads to the House, which is moving to pass through the reconciliation process a much <a href="https://docs.house.gov/meetings/BU/BU00/20250516/118284/BILLS-119pih.pdf" target="_blank" rel="noopener">larger bill</a> that aims to provide funding for Trump’s domestic priorities, retain tax cuts from 2017, raise the debt limit, and more.</p>
<p>One of the megabill&#8217;s many provisions features a deduction for &#8220;qualified&#8221; tips for individuals who work in &#8220;an occupation which traditionally and customarily received tips&#8221; from 2025 through 2028. It also contains sections dedicated to some of Trump&#8217;s other ideas, including no tax on overtime and no tax on auto loan interest.</p>
<p>Democrats have joined Republicans in supporting the push for &#8220;No Tax On Tips.&#8221; In fact, Vice President Kamala Harris <a href="https://www.dailywire.com/news/kamala-harris-steals-trumps-no-tax-on-tips-policy-proposal" target="_blank" rel="noopener">stole</a> Trump&#8217;s proposal as they competed against each other for the White House in the 2024 election.</p>
<p>In a speech on the Senate floor, Rosen <a href="https://x.com/SenJackyRosen/status/1924933653894701465" target="_blank" rel="noopener">said</a> that she wanted the legislation from Cruz to succeed rather than &#8220;forcing working families to choose between keeping their healthcare or keeping their tips&#8221; with the more comprehensive &#8220;one big, beautiful bill,&#8221; alluding to efforts by GOP lawmakers to rein in spending on programs such as Medicaid.</p>

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Senate Unanimously Passes ‘No Tax On Tips Act’

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Senate Unanimously Passes ‘No Tax On Tips Act’