For millions of Americans who rely on tips to make ends meet, a rare moment of unity in Washington has brought fresh hope. In an unusual unanimous vote, the U.S. Senate approved the No Tax on Tips Act, a bill designed to let service industry workers keep more of the money they earn. From restaurant servers and bartenders to hotel staff and delivery drivers, those who depend heavily on tips could soon see meaningful tax relief, making this legislation one of the most worker-focused measures in recent years.
The bill, introduced by Senator Ted Cruz (R-Texas) and Senator Jacky Rosen (D-Nevada), would allow employees to deduct up to $25,000 of their tip income per year from federal taxes. Importantly, the measure applies only to tips—not to wages, salaries, or employer-paid bonuses. Workers would still be required to report tips for recordkeeping, but their taxable income would be lowered by the deduction. Lawmakers behind the bill argue that this change gives workers a fairer system that reflects the reality of tip-based jobs.
Support for the bill has poured in from restaurant groups, hotel associations, and labor advocates who see it as a way to ease financial pressure on employees in tourism and hospitality. Senator Cruz praised the bill for “giving workers a fair chance to benefit from their efforts,” while Senator Rosen highlighted its impact on states like Nevada, where tourism drives much of the economy. Critics, however, have raised questions about whether reducing taxable income could affect Social Security contributions or change how some employers structure pay.
Despite those concerns, the unanimous Senate vote signals strong bipartisan backing. The bill now heads to the House of Representatives, where lawmakers will continue the debate. If it passes and is signed into law, the No Tax on Tips Act could reshape how tipped income is treated under federal tax policy—ensuring that workers who depend on tips get to keep more of what they earn at the end of each shift.