Senate Unanimously Passes Bill Creating $25,000 Tip Tax Deduction

The U.S. Senate unanimously passed a bipartisan bill known as the No Tax on Tips Act, which would eliminate federal income taxes on cash tips and create a tax deduction worth up to $25,000 for tipped workers earning up to $160,000. The bill, strongly supported by President Donald Trump as a key campaign promise, aims to provide financial relief to millions of service and hospitality workers, especially in states like Nevada where tipped workers make up a significant portion of the workforce. While the Senate approved the measure with unanimous consent, it must still pass the House of Representatives to become law. The bill excludes high earners and only applies to tips that are customarily reported, targeting occupations such as waitstaff and beauty service providers. Analysts note the policy's fiscal impact could reduce federal revenues by approximately $110 billion over ten years, and there is debate about its overall benefit to low-income tipped workers, many of whom already pay little to no federal income tax. Senate Democrats supported advancing the bill partly to offer relief amid other legislative battles, although some express concern about the broader tax bill's implications for social programs.