House Republicans' bill includes 'no tax on tips' proposal. How would it work? [View all]
Source: USA Today
May 17, 2025, 5:05 a.m. ET
House Republicans recently unveiled a sweeping tax plan that included a key promise from President Donald Trump’s campaign trail: no tax on tips.
Polling suggests it’s a popular idea across party lines, and Trump has credited the idea for aiding his 2024 election win. But critics argue that no taxes on tips is a costly, unfair tax break that will benefit few lower-income Americans.
“A relatively small number of workers are going to see any significant tax savings from this proposal,” said Joseph Rosenberg, a senior fellow at the left-leaning Urban-Brookings Tax Policy Center. Here's what we know so far about the latest proposal.
Who qualifies for no tax on tips?
The bill would create a temporary tax deduction through 2028 for employees and independent contractors in occupations that “traditionally and customarily received tips,” likely servers, for example. Should the bill pass, those occupations would be hashed out by the Treasury secretary. Highly compensated workers who make at least $160,000 in 2025 would be ineligible.
Read more: https://www.usatoday.com/story/money/2025/05/17/no-tax-on-tips-gop-bill/83649380007/
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