Senator Ted Cruz announced that the Senate has unanimously passed his “No Tax on Tips Act,” a bill that aligns with Donald Trump’s promise to end federal taxes on tips. “This is a big win for millions of waiters, waitresses, and others who rely on tips to make ends meet,” Cruz said.
The bill defines tips as payments received in cash, by card, check, or through tip-sharing and allows workers to deduct 100% of tipped income from their taxable earnings. It includes rules to prevent abuse—only roles that received tips before December 31, 2024, qualify.
The Senate version limits the deduction to \$25,000 per year and phases it out for individuals earning over \$150,000 (\$300,000 for couples). The House version has no cap but excludes filers earning above \$160,000. If passed, the tax break would apply from 2025 to 2028 for all filers.
Cruz said the bill supports the GOP’s goals of “lowering taxes and growing jobs.” He also highlighted his past tax work and praised the support from both parties.
The GOP-led House is expected to include the bill in a broader tax package, with bipartisan support already in place.
