Senate Unanimously Approves ‘No Tax on Tips Act,’ Aiming to Deliver Relief to Service Workers

WASHINGTON: In an unexpected and swift decision, the U.S. Senate unanimously passed the No Tax on Tips Act on Tuesday, signaling rare bipartisan agreement on a proposal that directly targets financial relief for millions of tipped workers.

The bill, initially introduced in January by Senator Ted Cruz (R-TX) and backed by a bipartisan group including Nevada Democrats Jacky Rosen and Catherine Cortez Masto, would allow service industry workers to deduct up to $25,000 in cash tips from their taxable income — provided those tips are reported to employers for payroll tax withholding.

To ensure the benefit is targeted at middle- and lower-income earners, the deduction is capped for individuals making $160,000 or less in 2025, with the income threshold set to rise in line with inflation in future years.

A Unanimous Decision with National Impact

Senator Rosen reintroduced the measure on the Senate floor using a procedure known as unanimous consent, a process typically reserved for non-controversial or procedural matters. Remarkably, not a single senator objected, allowing the bill to pass without the usual drawn-out legislative debate.

“Nevada has more tipped workers per capita than any other state,” Rosen said. “This legislation could make an immediate difference for countless families who rely on tips to make ends meet. It was a key promise made by President Trump right here in Nevada, and I support good ideas no matter where they come from.”

What Happens Next?

The bill now moves to the House of Representatives, where Republican lawmakers are weighing whether to include it in a larger legislative package that aligns with former President Donald Trump’s tax policy goals. However, given the strong bipartisan support in the Senate, there’s potential for the House to pass the measure independently, expediting the process.

Senator Cruz celebrated the rare bipartisan moment, saying, “This is a commonsense policy that will bring real relief to working Americans. Whether it moves forward as a stand-alone bill or part of a broader package, one way or another, No Tax on Tips is headed toward becoming law.”

Support Across the Aisle

Even Senate Minority Leader Chuck Schumer (D-NY), a frequent critic of Republican tax proposals, praised the passage. “From waitstaff to delivery drivers, working Americans are the ones who deserve tax breaks — not billionaires,” Schumer said. “This bill is a step in the right direction, and I commend Senator Rosen for her leadership.”

If the legislation is enacted, it could offer tangible financial relief to workers across industries who rely heavily on tipping — such as restaurant servers, hotel staff, and gig economy drivers — all of whom have faced economic challenges in recent years.

Learn More about No Tax on Tips Act

For more information on federal tax policies an d updates, visit the official IRS website.

Track the progress of this bill on Congress.gov.

Learn about tax deductions and income thresholds via USA.gov – Taxes.