Latest news with #NoTaxonTips'
Yahoo
21-05-2025
- Business
- Yahoo
When does 'no tax on tips' begin? Latest moves made on Trump's campaign promise
On May 20, the United States Senate passed a bill to eliminate taxes on overtime, but the change may not happen for a while. Sen. Ted Cruz, R-Texas, introduced the bill in January, which was brought up for a voice vote by Sen. Jacky Rosen, D-Nevada. It passed with unanimous consent – a rare occurrence for substantive legislation. The deduction would apply to cash tips worth up to $25,000. People who earn up to $160,000 could claim it, and the amount would rise along with inflation. Ending taxes on tips would cost around $110 billion in federal revenues over the next 10 years, according to estimates by the center-right Peter G. Peterson Foundation. Here is what to know about the move from the Senate. The House has been working to pass the One Big Beautiful Bill Act, which includes eliminating tips and overtime taxes. In the meantime, the Senate passed its own bill to remove taxes on tips. In a surprise move on May 20, the Senate passed the "No Tax on Tips Act", which now heads to the House for their vote. Here's what it includes: Tax deduction for tips worth up to $25,000: This is limited to cash tips that workers report to employers for withholding purposes on payroll taxes. It is restricted to those who earn $160,000 or less in 2025, but this will change with inflation in the coming years. "Whether it passes free-standing or as part of the bigger bill, one way or another, 'No Tax on Tips' is going to become law and give real relief to hard-working Americans," said Republican Sen. Ted Cruz, one of the senators who proposed the bill. "So I'm proud of what the Senate just did, and I commend Democrats and Republicans, even at a time of partisan division, coming together and agreeing on this commonsense policy." If passed by the House, the Senate's No Tax on Tips Act could remove the no-tax-on-tips part of Trump's larger sweeping bill that the House is working on to pass through faster. Since the bill has to go to the House after the Senate, there is no clear timeframe when the tax cuts could begin. However, the budget bill the House is working to pass would apply to paychecks between 2026 and 2034. The Senate's No Tax on Tips Act would likely not have a deadline like the House budget bill. It is important to note that the Senate's Act only applies to taxes on tips. If only the Senate bill is passed, taxes on overtime will still exist. The House Bill would have to pass both the House and the Senate for taxes on overtime to go away. There's no actual timeline for when the spending bill must be approved before the fiscal year begins. The House of Representatives must pass all budget bills by June 30. However, Congress has no official deadline other than the Oct. 1 beginning of the fiscal year. Both sides of legislation have deadlines throughout the year to progress through the budget, but only the House has a deadline for the final budget. Once Congress and the House pass the budget bill, it will be sent to the president's desk, where he has 10 days to sign it. In the 119th Congress, there were 53 Republicans, 45 Democrats and 2 Independents in the U.S. Senate, and the GOP held a two-seat edge in the House of Representatives. Races were held this year to fill seats vacated by Republicans Matt Gaetz and Michael Waltz, both of whom resigned to take appointments in the Trump administration, though Gaetz never assumed his role. The Senate requires a 60-vote majority to pass the bill, meaning we may see a close voting margin, similar to the one in the House earlier this year. This article originally appeared on Memphis Commercial Appeal: Senate passed no taxes on tips bill. What happens now? What to know
Time of India
21-05-2025
- Business
- Time of India
Trump Aide's Victory Lap In Senate After Big Bill Boost; Ted Cruz Shares ‘Beautiful Waitress Story'
/ May 21, 2025, 11:24PM IST Senator Ted Cruz took a victory lap after the U.S. Senate passed the 'No Tax on Tips' bill, a measure aimed at exempting service workers' tips from federal taxation. Celebrating the moment, Cruz shared a story involving former U.S. President Donald Trump and a 'beautiful' waitress, highlighting Trump's long-standing support for the policy. The Texas senator framed the bill as a win for hardworking Americans, especially those in the service industry, and a nod to Trump's pro-worker messaging. Watch.
Hindustan Times
21-05-2025
- Business
- Hindustan Times
Internet slams ‘No Tax on Tips' Act passed by Senate: ‘Just pay a living wage'
A large section of the internet has expressed doubts about the 'No Tax on Tips' bill passed by the Senate on Tuesday. The bill, passed with unanimous consent, will eliminate federal taxes on tips, reported The Hill. The bill allows workers to deduct 100% of their reported tips, including those received in cash, by credit or debit card, or by check, from their federal income taxes. ''No Tax On Tips' was one of President Trump's key promises to the American people, which he unveiled in my state of Nevada," said Democrat Jacky Rosen, who brought the bill to the floor. 'And, I am not afraid to embrace a good idea, wherever it comes from." 'Nevadans, our families, are being squeezed, and we need real relief,' Rosen said. 'For some, many service and hospitality workers, tips aren't extra, it's part of their income that they use to make ends meet.' Tipping in the US is notably more entrenched and generous than in much of the world, often forming a significant part of service workers' income, particularly in restaurants where tips of 15–25% are customary and expected. In contrast, many other countries either include service charges in the bill or tip more modestly, if at all, as service staff are typically paid higher base wages. Under federal law, employers can pay tipped workers as little as $2.13 per hour – far below the standard federal minimum wage of $7.25 per hour - as long as the worker's tips make up the difference. Critics on forums like 'End Tipping' on Reddit argue that tipping in the US feels more like a social obligation than a token of appreciation, and that servers should be paid minimum wage like other industries. While some welcomed the concept of not paying taxes on tips, the bill reignited the debate around living wage vs tips. A large section of the internet expressed discontent with the Act, pointing out several ways in which it could be misused. 'Seems like this would make it easier for these folks to 'tip' their friends and launder money,' read one comment on Reddit. 'Why can't they just pass a law to make an actual living wage, instead of jumping through these bulls*** hoops,' another asked. 'The government will do anything except actually fix a problem.' Many saw it as a move that would unfairly benefit the server community. 'I don't get the support for this by anyone other than servers. I mean from their standpoint, sure, who doesn't want tax-free income? But the rest of us would like the majority portion of our income to be tax-free too! Tax relief programs should be designed so that they help everyone, not just one individual group of people,' a Reddit user added. 'Why is the government favoring some workers over others? Now the rest of us get to subsidize tax cuts for tipped workers when the rest of us are getting hosed. This is bad policy,' commented a person on the Politics subreddit, where the bill has been widely discussed and dissected.
Yahoo
20-05-2025
- Business
- Yahoo
Senate unexpectedly passes the 'No Tax on Tips Act' in a unanimous vote
WASHINGTON — In a surprise move, the Republican-led Senate quickly passed the "No Tax on Tips Act" on Tuesday, giving its official stamp of approval to an idea that has gained traction since President Donald Trump campaigned on it in 2024. The legislation would create a new tax deduction worth up to $25,000 for tips, limited to cash tips that that workers report to employers for withholding purposes on payroll taxes. The tax break is also restricted to employees who earn earn $160,000 or less in 2025, an amount that will rise with inflation in upcoming years. It was introduced in January by Sen. Ted Cruz, R-Texas, and a bipartisan group of cosponsors including Nevada's two Democratic senators, Jacky Rosen and Catherine Cortez Masto. Rosen brought the bill up in the Senate for a "unanimous consent" request on Tuesday, which means any individual senator can block it. The process is typically used for more mundane matters, and bills are routinely called up and thwarted by an objection. Consequential tax bills usually follow a more complex process. But in this case, none of the other 99 senators objected to Rosen's proposition, which led to the legislation passing. "Nevada has more tipped workers per capita than any other state. So this bill would mean immediate financial relief for countless hard working families," Rosen said. "'No Tax on Tips' was one of President Trump's key promises to the American people, which he unveiled in my state of Nevada. And I am not afraid to embrace a good idea, wherever it comes from." The bill now goes to the House, where Republicans have been seeking to include a version of the proposal in their sweeping party-line package for Trump's agenda. But the broad Democratic support for the idea gives GOP leaders options, including the possibility of passing it separately and removing it from broader legislation to lower the cost or spend the money elsewhere. "Whether it passes free standing or as part of the bigger bill one way or another, 'No Tax on Tips' is going to become law and give real relief to hard working Americans," Cruz said on the floor. "So I'm proud of what the Senate just did, and I commend Democrats and Republicans, even at a time of partisan division, coming together and agreeing on this common sense policy." Senate Minority Leader Chuck Schumer, D-N.Y., also celebrated passage of the legislation on Tuesday, crediting Rosen. "Working Americans — from servers, to bartenders, delivery drivers, and everything in between — work hard for every dollar they earn and are the ones who deserve tax relief, not the ultra-rich," Schumer said in a statement. "While President Trump and Republicans push tax breaks for billionaires and stick the middle class with the bill, Senate Democrats are standing strong to protect America's working families." This article was originally published on
NBC News
20-05-2025
- Business
- NBC News
Senate unexpectedly passes the 'No Tax on Tips Act' in a unanimous vote
WASHINGTON — In a surprise move, the Republican-led Senate quickly passed the "No Tax on Tips Act" on Tuesday, giving its official stamp of approval to an idea that has gained traction since President Donald Trump campaigned on it in 2024. The legislation would create a new tax deduction worth up to $25,000 for tips, limited to cash tips that that workers report to employers for withholding purposes on payroll taxes. The tax break is also restricted to employees who earn earn $160,000 or less in 2025, an amount that will rise with inflation in upcoming years. It was introduced in January by Sen. Ted Cruz, R-Texas, and a bipartisan group of cosponsors including Nevada's two Democratic senators, Jacky Rosen and Catherine Cortez Masto. Rosen brought the bill up in the Senate for a "unanimous consent" request on Tuesday, which means any individual senator can block it. The process is typically used for more mundane matters, and bills are routinely called up and thwarted by an objection. Consequential tax bills usually follow a more complex process. But in this case, none of the other 99 senators objected to Rosen's proposition, which led to the legislation passing. "Nevada has more tipped workers per capita than any other state. So this bill would mean immediate financial relief for countless hard working families," Rosen said. "'No Tax on Tips' was one of President Trump's key promises to the American people, which he unveiled in my state of Nevada. And I am not afraid to embrace a good idea, wherever it comes from." The bill now goes to the House, where Republicans have been seeking to include a version of the proposal in their sweeping party-line package for Trump's agenda. But the broad Democratic support for the idea gives GOP leaders options, including the possibility of passing it separately and removing it from broader legislation to lower the cost or spend the money elsewhere. "Whether it passes free standing or as part of the bigger bill one way or another, 'No Tax on Tips' is going to become law and give real relief to hard working Americans," Cruz said on the floor. "So I'm proud of what the Senate just did, and I commend Democrats and Republicans, even at a time of partisan division, coming together and agreeing on this common sense policy."
