US EditionMassive spending bill allows workers to deduct tip and overtime pay income from taxes through 2028
- The House of Representatives approved a $4.5 trillion spending and tax bill on July 3, 2025, sending it to President Trump's desk.
- The bill advances Trump's 2024 campaign goals by temporarily exempting income from tips, extra hours worked, and Social Security earnings for elderly beneficiaries from federal income taxation.
- The legislation sets a $25,000 cap on deductible income from tips and permits a deduction of $12,500 for overtime earnings, with both benefits gradually reduced for individuals earning above $150,000. Additionally, seniors who are taxed on Social Security income can claim a $6,000 deduction.
- The White House estimates tipped workers will see an average $1,675 increase in take-home pay annually, while critics warn the bill will add trillions to the national debt and cause health insurance losses.
- The tax breaks apply from 2025 to 2028 and expire thereafter, prompting expectations of further debate and possible reintroduction of similar measures.
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Congress passes ‘no tax on tips’ as Illinois legislator eyes policy for state
(The Center Square) – Congress passed the “one big beautiful bill” and in it a provision that temporarily exempts certain tipped income from federal taxes, a major shift from long-standing tax policy treating tips as taxable income.
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Total News Sources23
Leaning Left8Leaning Right3Center9Last UpdatedBias Distribution45% Center
Bias Distribution
- 45% of the sources are Center
45% Center
L 40%
C 45%
15%
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