S. 129 · 119th Congress
No Tax on Tips Act
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Passed the Senate without a recorded vote. It passed by voice vote or unanimous consent, which don't record how each member voted. Its text can still change before it becomes law.
R
CruzSponsor8 cosponsors · 2 D, 6 R
7 signed on when it was introduced; the rest joined later. Cosponsors who withdrew aren't shown.
- Senate Introduced Jan 16, 2025
- Senate Passed May 20, 2025
This bill establishes a new tax deduction of up to $25,000 for tips, subject to limitations. The bill also expands the business tax credit for the portion of payroll taxes an employer pays on certain tips to include payroll taxes paid on tips received in connection with certain beauty services.
What it does: CRS summary · Introduced in Senate · Jan 16, 2025
No Tax on Tips Act
This bill establishes a new tax deduction of up to $25,000 for tips, subject to limitations. The bill also expands the business tax credit for the portion of payroll taxes an employer pays on certain tips to include payroll taxes paid on tips received in connection with certain beauty services.
Under the bill, the new tax deduction for tips is limited to cash tips (1) received by an employee during the course of employment in an occupation that customarily receives tips, and (2) reported by the employee to the employer for purposes of withholding payroll taxes. (Under current law, an employee is required to report tips exceeding $20 per month to their employer.)
Further, an employee with compensation exceeding a specified threshold ($160,000 in 2025 and adjusted annually for inflation) in the prior tax year may not claim the new tax deduction for tips.
Finally, the bill expands 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. (Under current law, an employer is allowed a business tax credit for the amount of payroll taxes paid on certain tips received by an employee in connection with providing, delivering, or serving food or beverages.)
Written by the nonpartisan Congressional Research Service. All summary versions on Congress.gov
About this bill and sources
Official title: No Tax on Tips Act
Latest action (May 26, 2025): Held at the desk.
Policy area: Taxation · Origin: Senate · Introduced: Jan 16, 2025
Official page on Congress.gov · Bill text (GovInfo) · Status record (XML)
- Senate Introduced Jan 16, 2025
- Senate Passed May 20, 2025
No recorded floor vote found.