S129Passed Senate

No Tax on Tips Act

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Introduced
In Committee
Passed One Chamber
4
Passed Both
5
Signed into Law
119th
Congress
2025-01-16
Introduced
8
Cosponsors
S
ⓘ
Type

Sponsor

Ted Cruz
Ted Cruz
Republican · TX · Senator
Votes with party: 74.0% (813 recorded votes)
Top industries funding sponsor:
  • Conservative Groups$464k

Full profile: /officials/C001098

Source: Congress.gov · FEC

Cosponsors (8)

Members who have signed on to support this bill since introduction. Source: Congress.gov.

8 cosponsors on record at Congress.gov. The named list is syncing into Govwatch and will appear here shortly — view on Congress.gov in the meantime.

Latest Action

The most recent step in the bill's legislative path. Committee Activity below shows referrals and reports; the full action-by-action history including floor proceedings lives at Congress.gov →

Held at the desk.

2025-05-26

Source: Congress.gov

Committee Activity

Currently in

Previously

Plain-English Summary

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.)

Plain-English rewrite of the Congressional Research Service summary published on Congress.gov. Cached and reviewed.

Subjects

Taxation
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