Senate Passes Tax Relief Bill for Workers Receiving Tips

On Tuesday, the US Senate passed a measure aimed at helping hardworking Americans keep more of their earnings. This bipartisan bill, introduced by Senator Ted Cruz in January 2025, received strong support from both sides of the aisle.

With no dissent, the bill moved forward and is now headed to the House of Representatives.

The new legislation proposes a tax deduction of up to $25,000 for cash tips that workers report to their employers, applicable for payroll tax withholding. Workers earning up to $160,000 annually will be eligible for this deduction.

In a related note, President Donald Trump made a promise at a Las Vegas rally back in June 2024 to make the tax cuts established in 2017 permanent, emphasizing that these cuts are set to expire at the end of 2025.

Cruz noted that the bill would either be passed as an independent measure or part of a larger legislative package, stating, “There’s no tax on tips” in some form, and that it would genuinely benefit hardworking Americans.

He expressed pride in the bipartisan support, recognizing both Democratic and Republican contributions to a policy that many view as common sense.