US Edition7 On Your Side Breaks Down Trump's 'No Tax on Tips and Overtime' Changes
UNITED STATES, JUL 21 – The federal law exempts up to $25,000 in tips from income tax for eligible workers, potentially adding $2,500 to $3,000 in annual take-home pay, starting in 2025.
- President Donald Trump signed the 'No Tax on Tips' provision into law on July 4, 2025, affecting tipped workers nationwide.
- The law allows eligible workers to deduct up to $25,000 in tips from federal taxable income starting in 2026, with phase-outs over $150,000 for singles and $300,000 for joint filers.
- The IRS will publish a list by October 2 of qualifying occupations, though uncertainty remains about which tipped workers and tips from large parties qualify.
- Kate Ashford of Nerd Wallet highlighted that the deduction is particularly beneficial for individuals earning this type of income, but she also pointed out that it has income restrictions.
- While the tax break could increase take-home pay, critics argue wage increases, not tax breaks, better address tipped workers' financial challenges, and the law excludes payroll taxes and state taxes.
15 Articles
15 Articles
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How will Trump’s tax breaks on tips affect Maine workers?
Experts weigh in on how this provision of President Trump's 'One Big Beautiful Bill' will work.
7 On Your Side breaks down Trump's 'no tax on tips and overtime' changes
Millions of U.S. workers who earn tips and overtime pay may be eligible for a federal tax break when they file their 2025 income taxes next year. 7 On Your Side has everything you need to know.
Trump's 'No Tax on Tips' policy could put thousands back in servers' pockets
One part of President Donald Trump's 'Big Beautiful Bill' touches on saving tipped workers money. While tipped workers would still pay payroll taxes for Social Security and Medicare, the income tax exemption could significantly increase take-home pay for service industry workers. President Trump's "No Tax on Tips" policy could significantly impact tipped workers' take-home pay Under Trump's"No Tax on Tips" policy, servers making up to $150,000 i…
Admitted 'big tipper' makes excellent case for why tipping culture has gone too far
US tipping culture has been met with criticism since its very origin leading back to the Civil War, when employers refused to pay their newly freed Black workers, and instead had them rely on tips. Unfortunately we are still having the same conversation today. Companies continue to not pay their workers a livable wage, thus forcing them to rely on the generosity of customers…many of whom are also trying to make their own money stretch a little f…
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