Tax Credits for Tipped Wages and Overtime Pay Highlighted by Treasury Secretary
JEFFERSON VALLEY, N.Y. — On Friday, Treasury Secretary Scott Bessent emphasized the Trump administration’s tax credits related to tipped wages and overtime pay, noting that close to 30 million Americans are benefiting from this initiative.
The “tip exemption” and “overtime tax exemption” deductions are features of President Trump’s One Big Beautiful Building Act (OBBBA). This legislation also includes reductions on auto loan interest, boosts to standard and local tax credits, as well as notable new tax benefits aimed at businesses and seniors.
During a gathering with small business owners in the Hudson Valley, Bessent, accompanied by Rep. Mike Lawler (R-N.Y.), mentioned that 5.7 million taxpayers have taken advantage of the “tip exemption.” Additionally, he indicated that around 23 million individuals have applied for the “overtime tax exemption,” calling the revised overtime guidelines “the biggest thing yet.”
The current statistics mark an increase from the 24.6 million who were utilizing the two new deductions that Bessent disclosed last month, shared just ahead of the impending April 15 tax filing deadline.
At the event, members from both sides of the aisle expressed their support for Trump’s tax cuts, along with Lawler’s initiative to raise the cap on state and local tax (SALT) deductions.
Raj Aman, who manages a bar at a golf course in Yorktown, New York, observed that the tipping exemption has sparked greater workforce participation.
“Three years back, hiring servers and bartenders was tough. This year, we’ve seen a real change, with people actively asking if we have openings,” said Aman, noting they conducted over 85 interviews as they prepared for the golf season.
“Everyone prefers their tips tax-free. It’s really ramping up their income,” he added.
Brendel Logan Charles, a Democratic deputy director in neighboring Ramapo, remarked that the positive results of the tax cuts should encourage her party to reevaluate its stance.
“Thank you, Congressman,” she expressed to Lawler. “This is a significant day for us, and I will urge my Democratic peers to collaborate more.”
Claire Kerrigan, a bartender at AJ’s Bar and Grill, shared that the tax break was beneficial because it allowed her to spend the earnings rather than setting them aside for taxes.
“I won’t just stash it away for property taxes; this support really makes a difference,” Kerrigan noted.
Sergio Esposito, the former president of the Yorktown Chamber of Commerce and current town councilman, argued that the full effects of the tax cuts aren’t fully realized yet.
“People are going to be spending more, possibly dining out or purchasing items they typically wouldn’t,” he suggested, even predicting a “big Black Friday” ahead.
Bessent’s visit also included a stop at the Regeneron Pharmaceuticals facility in Tarrytown, which Lawler described as the district’s “crown jewel.”
“What we witnessed there is strong, pro-growth economic policies at work—world-class innovation and numerous well-paying jobs right here,” Lawler commented.
Bessent and Lawler argued that tax cuts are crucial for economic growth, with Regeneron serving as a prime example.
“Thanks to the Working Families Tax Cuts and Jobs Act, companies like Regeneron can immediately expense research and development costs, enabling them to hire more skilled workers and keep jobs in the U.S.,” Lawler stated.
Bessent highlighted the encouraging news of new job creation in New York and noted this trend is occurring across the country.
“We anticipate an additional $100 billion in deductions for many businesses,” he stated.
Additionally, he praised the administration’s proposal to establish investment accounts for children born during a president’s second term, which would provide a $1,000 initial fund that could grow until they reach 18.
“I believe this is crucial for youth, perhaps the most significant initiative since the GI Bill,” Bessent remarked.
