Bill to Make Tips Tax-Free

In a rare moment of bipartisan agreement, the U.S. Senate has unanimously passed the No Tax on Tips Act, a bill that would exempt tip income from federal taxation, providing direct financial relief to millions of American service industry workers.

Introduced by Senator Ted Cruz of Texas and co-sponsored by Senator Jacky Rosen of Nevada, the legislation is designed to support workers in sectors like hospitality, food service, and delivery—jobs where tipping often makes up the majority of income.

“This is about fairness,” Senator Cruz said. “These workers are putting in long hours and living paycheck to paycheck. They deserve to keep more of what they earn.”

Senator Rosen added that in states with tourism-heavy economies, such as Nevada, service workers are the “backbone of the economy,” and this bill gives them “the respect and support they deserve.”

What the Bill Does

The No Tax on Tips Act proposes amending the federal tax code to make tip income exempt from federal income taxes. Under current law, tipped workers must report their tips as income, and employers are required to withhold taxes. If the bill becomes law:

  • Tips from customers would still need to be reported.
  • They would no longer be taxed at the federal level.
  • The change applies to tips only—not wages or employer-paid bonuses.

Supporters say this change simplifies reporting, eases burdens on small businesses, and increases take-home pay for workers.

Reaction and Outlook

The bill has been met with strong approval from worker advocacy groups and service employees, who say it could lead to hundreds or even thousands of dollars in annual savings.

While some tax experts have raised concerns about enforcement and impacts on Social Security contributions, lawmakers say these are manageable issues.

The bill now moves to the House of Representatives, where it is expected to be debated in the coming weeks.

Related Posts

People Are Coming Out As Berris**ual

People Are Coming Out As Berris**ual

What “Berrisual” Means — and Why It’s Gaining Attention Online** A new identity term, berrisual**, is emerging across online queer spaces like Reddit, Tumblr, and LGBTQ+ wikis. It…

Waking Up Between 3 am and 5 am? Here’s

Waking Up Between 3 am and 5 am? Here’s

Many factors contribute to this, including stress, insomnia, aging, medications, health conditions, and lifestyle choices. Stress is a major culprit, affecting both your body’s physical response and…

Why Is There an Extra Chain Hanging at the Back of a Tanker Truck?

Why Is There an Extra Chain Hanging at the Back of a Tanker Truck?

Tanker trucks are designed with safety as their top priority, especially when transporting flammable liquids like fuel or chemicals. One small but crucial safety feature is the…

Erika Kirk reveals what JD Vance whispered in her ear during ‘inappropriate’ hug

Erika Kirk reveals what JD Vance whispered in her ear during ‘inappropriate’ hug

Erika Kirk has been forced to live through an indescribable series of events these past two and a half months. Not only was the love of her…

Gary Sinise Announces His Son Mac Has Died Aged 33. Read full story in comment,.,/,/,/

Gary Sinise Announces His Son Mac Has Died Aged 33. Read full story in comment,.,/,/,/

Forrest Gump star Gary Sinise shared the heartbreaking news of his son’s passing on the Gary Sinise Foundation‘s website and his Instagram page, revealing that the 33-year-old McCanna Anthony “Mac” Sinise…

The Truth Behind the Persistent Orange Towel Marks

The Truth Behind the Persistent Orange Towel Marks

I’ll never forget the morning I first noticed it — a bright, almost neon orange blotch glaring up at me from my favorite gray towel. The color…