The Senate unanimously passed the No Tax on Tips Act on Tuesday, May 20, giving its official stamp of approval to an idea that has gained traction since last year.
If approved by the House, the legislation will create a new tax deduction of up to $25,000 for tips, though it’s limited to cash tips workers report to their employers for withholding purposes on payroll taxes.
The tax break is only available to workers who make $160,000 or less in 2025, but that amount will rise in the future to account for inflation. Read more.