A Republican bill with 2 Democratic cosponsors · See all 8 cosponsors
Last activity — Held at the desk.
Passed one chamber, waiting for the other to take it up
Passed one chamber, and the other has not yet sent it to a committee or put it on its calendar.
The other chamber will hand it to a committee, place it on its calendar, or leave it where it is. Nothing has been decided, and a bill can sit here indefinitely.
Its path through Congress
- Introduced
- Passed Senate unanimous consent
- Awaiting House
The Senate by unanimous consent (no one objected, so there was no vote): no senator's position on it was recorded.
What this bill would do
The "No Tax on Tips Act" aims to amend the Internal Revenue Code of 1986 to remove income tax on qualified tips. It establishes a deduction for individual taxpayers for tips received in occupations that traditionally received them before December 31, 2023. This deduction is capped at $25,000 per taxable year. The bill also extends a credit for employer Social Security taxes to include beauty service establishments. These changes are set to apply to taxable years beginning after December 31, 2024.
Yes· 3 of 9
- Scored +5
Would households on low incomes be better off under this?
The bill provides a significant tax deduction for workers in service industries who are often in lower income brackets.
- Scored +5
Does this cut taxes for middle-income families?
The bill creates a deduction for qualified tips up to $25,000, which reduces the income tax burden for many middle-income service workers.
- Scored +4
Would middle-income households be better off under this?
The $25,000 deduction offers substantial tax relief for many middle-income service professionals.
The opposite
- Scored -2
Does this reduce what the federal government spends?
The reduction in tax revenue from the new tip deduction may increase the federal deficit.
Who it would affect, and how
Potential Positive Impacts for People
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Tax Relief for Tip Earners: Individuals working in occupations that traditionally receive tips can claim a deduction for their qualified tips, which helps eliminate the application of income tax on those earnings (Section 2(a)(1)).
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Accessibility for All Taxpayers: The deduction is specifically allowed for non-itemizers, ensuring a wider range of people can benefit from the tax reduction (Section 2(b)).
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Benefit for Beauty Service Workers: The bill extends a credit for employer Social Security taxes to include beauty services, such as barbering, hair care, nail care, esthetics, and body or spa treatments (Section 3(a)).
Potential Negative Impacts for People
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Income Limits on Deductions: The deduction for qualified tips is limited to a maximum of $25,000 per taxpayer per year (Section 2(a)(2)).
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Restrictions Based on Previous Compensation: The deduction cannot be claimed by individuals who had compensation from their employer in the preceding taxable year that exceeded a specific amount set under section 414(q)(1)(B)(i) (Section 2(a)(2)).
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Occupation Restrictions: Only certain occupations are eligible, specifically those the Secretary of the Treasury identifies as traditionally and customarily receiving tips on or before December 31, 2023 (Section 2(a)(2)).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Tap or hover a score for the reason it gave.
- Demographic And Interest Groups
- Would households on low incomes be better off under this? — The bill provides a significant tax deduction for workers in service industries who are often in lower income brackets. Would middle-income households be better off under this? — The $25,000 deduction offers substantial tax relief for many middle-income service professionals. Would business owners be better off under this? — Beauty service business owners benefit from the extension of the employer Social Security tax credit. Would Hispanic Americans be better off under this? — The bill benefits service workers, a demographic group where Hispanic Americans are highly represented. Would women be better off under this? — The extension of the tax credit to beauty services benefits industries that employ a high percentage of women.
- Economy And Finance
- Does this cut taxes for middle-income families? — The bill creates a deduction for qualified tips up to $25,000, which reduces the income tax burden for many middle-income service workers. Does this cut taxes for small businesses? — The bill extends the employer Social Security tax credit to include beauty service establishments, reducing costs for these businesses. Is this likely to grow the economy? — By increasing the take-home pay of tip earners, the bill may marginally increase consumer spending. Does this reduce what the federal government spends? — The reduction in tax revenue from the new tip deduction may increase the federal deficit.
- Social Issues And Justice
- Is this likely to lift people out of poverty? — The tax deduction increases the net income for low-wage workers who rely on tips.
- 5/26/2025
- Held at the desk.
- Received in the House.
- 5/23/2025
- Message on Senate action sent to the House.
- 5/20/2025
- Senate Committee on Finance discharged by Unanimous Consent.
- Passed/agreed to in Senate: Passed Senate without amendment by Unanimous Consent.
- Passed Senate without amendment by Unanimous Consent. (consideration: CR S2993-2995; text: CR S2993-2994)
- 1/27/2025
- 1 Cosponsor added.
- 1/16/2025
- Read twice and referred to the Committee on Finance.
- 7 Cosponsors added.
- Introduced in Senate
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Kevin CramerRepublican · North Dakota
Catherine Cortez MastoDemocrat · Nevada
Steve DainesRepublican · Montana
Josh HawleyRepublican · Missouri
Roger MarshallRepublican · Kansas
Jacky RosenDemocrat · Nevada
Pete RickettsRepublican · Nebraska
Rick ScottRepublican · Florida