Get the Facts: Senate passes No Tax on Tips Act. Here's what's in the bill
The U.S. Senate passed the on Tuesday, sending the bill to the U.S. House for consideration.
President Donald Trump announced the plan to end taxation on tipped income while campaigning during the 2024 election, saying he got the idea from a server at his Las Vegas hotel.
What's in the No Tax on Tips Act?
The bill, introduced in January, would create a federal income tax deduction of up to $25,000 a year for cash tips for eligible employees.
Cash tips include tips given in cash, credit and debit card, and checks.
Employees would only be eligible if they were compensated less than $160,000 in the 2024-2025 tax year, according to the legislation.
If passed, the U.S. Department of Treasury would have 90 days to publish a list of eligible occupations. Some examples of eligible occupations could include, but are not limited to, servers, bartenders and delivery drivers.
The bill would also expand the business tax credit "for the portion of payroll taxes that an employer pays on certain tips to include payroll taxes paid on tips received in connection with barbering and hair care, nail care, esthetics, and body and spa treatments," according to the bill's description page.
The bill would still need to be passed by the House, and then would be given to Trump to sign into law.
