Proposed Bill Would Exempt Tips from Taxes
Senate Unanimously Passes No Tax on Tips Act
In a rare show of unity, the U.S. Senate has unanimously approved the No Tax on Tips Act,
exempting tip income from federal taxation and offering financial relief to millions of service workers.
Introduced by Senator Ted Cruz (R-TX) and co-sponsored by Senator Jacky Rosen (D-NV), the bill targets industries like food service,
hospitality, and delivery, where tips make up much of workers’ pay.
“This is about fairness,” Cruz said. “They deserve to keep more of what they earn.”
Rosen added that service workers are the “backbone of the economy” in states like Nevada.
The bill would amend the tax code so that tips, though still reportable, are no longer taxed at the federal level.
Wages and bonuses remain taxable.
Supporters argue the change will simplify reporting, reduce small business burdens,
and boost take-home pay for workers living paycheck to paycheck.
