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Senate unanimously approves bill to eliminate tax on tips

  • The U.S. Senate unanimously passed the No Tax on Tips Act on Tuesday, which removes federal income taxes on earnings received from tips by hospitality and service industry employees.
  • The legislation was inspired by President Trump’s campaign promise made during a 2024 Nevada stop and faced initial GOP infighting on his broader agenda.
  • The bill allows tipped employees a federal income tax deduction capped at $25,000, excluding those earning above $160,000, and aims to aid hospitality workers amid rising costs.
  • Senator Cruz declared the legislation near certain to become law, calling it "political genius," while Senator Rosen urged passing it separately from extreme budget bills.
  • The bill’s passage signals a bipartisan victory fulfilling Trump’s pledge and could provide immediate financial relief, especially in states like Nevada where many rely on tips.
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Forbes broke the news in United States on Tuesday, May 20, 2025.
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