WASHINGTON – In a shocking move, the Republican-led Senate quickly passed the “Tips No Tax Act” on Tuesday, marking official approval for an idea that has gained traction since President Donald Trump’s campaign in 2024.
The law creates new tax deductions worth up to $25,000 for tips, limited to cash tips workers report to employers for payroll tax withholding. The tax credit is also limited to employees making under $160,000 in 2025.
It was featured in January by a group of lawmakers including Sen. R-Texas Ted Cruz and two Nevada Democratic senators, Jackie Rosen and Katherine Cortez Masto.
Rosen raised the bill in the Senate on Tuesday to demand “unanimous consent.” This means that individual senators can block it. This process is usually used for more mundane issues, with invoices being routinely called and obstructed by objections. The resulting tax bills usually follow a more complicated process. However, in this case, the law was passed because none of the other 99 senators opposed Rosen’s proposition.
“Nevada has workers who are more likely to be per capita than any other state, so this bill therefore means immediate financial relief for countless hardworking families,” Rosen said. “The ‘tax on tips’ was one of President Trump’s important promises to Americans he revealed in my Nevada state. And I’m not afraid to embrace good ideas wherever it comes from. ”
The bill now goes to the House, where Republicans are seeking to include a version of the proposal in their sweeping party lineage package for Trump’s agenda. However, broad democratic support for this idea provides the option for GOP leaders. This could involve passing it separately and removing it from the broader law to reduce costs or spending money elsewhere.
“It’s either independent or in some way as part of a bigger bill, “There’s no tax on tips” will become law and provide real relief to hardworking Americans,” Cruz said on the floor. “So I’m proud of what the Senate did, and even in the partisan section I admire Democrats and Republicans and agree with this common sense policy.”
Senate minority leader Chuck Schumer (DN.Y.) also celebrated passing the law on Tuesday, celebrating Rosen.
“From servers to bartenders to delivery drivers and everything in between, working Americans work hard for every dollar they make and deserve tax relief, not super rich,” Schumer said in a statement. “While President Trump and Republicans are pushing tax credits for billionaires and sticking the middle class on the bill, Senate Democrats are standing strong to protect American working families.”
