



If you are one of the millions of Americans who receive tips for their work, there could be good news coming soon.
In a unanimous vote, the Senate passed the No Tax on Tips Act late Tuesday. This moves the idea of eliminating federal income tax for cash tips one step closer to reality.
The proposal would amend the Internal Revenue Code to exempt cash tips from federal income taxes. This would include any tips given in cash, credit and debit cards, and checks.
Employees would be allowed to claim a 100% deduction when they file their taxes for up to $25,000 per tax year.
However, in the legislation the Treasury secretary must publish a list of eligible occupations 90 days after the bill is passed.
The bill was first introduced in January by Sen. Ted Cruz, R-TX, and a bipartisan group of co-sponsors including Nevada’s two Democratic senators, Jacky Rosen and Catherine Cortez Masto.
“No Tax on Tips was one of President Trump’s key promises to the American people, which he unveiled in my state of Nevada — and I am not afraid to embrace a good idea, wherever it comes from,” Rosen said of the bill, according to Fox News Digital. In remarks on the Senate floor, she said, “I agreed we need to get this done. It’s not a time for politics, it’s a time for progress for hard-working Americans.”
Cruz said the bipartisan support was key.
“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,” Cruz said in a statement to Fox News Digital. “Tuesday, I went with Senator Rosen to the floor to secure Senate passage of the bill. 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.”
The No Tax on Tips Act still needs approval from the House. If it passes there, it heads to Trump to be signed into law.