In a rare moment of bipartisan unity, the U.S. Senate unanimously voted 100–0 to pass the “No Tax on Tips Act,” led by Texas Republican Senator Ted Cruz and originally promised by former President Donald Trump during his 2024 campaign. The bill, if signed into law, would exempt tips—whether received in cash, by card, or shared among workers—from federal income tax, providing relief to millions of Americans in service industries who rely on gratuities to make ends meet.

Under the Senate version, workers can deduct tips from taxable income up to $25,000 annually, with income phase-outs for individuals earning over $150,000 and couples over $300,000. To ensure the benefit goes to legitimate tipped workers, the Treasury Secretary must publish qualifying occupations within 90 days, and eligibility is limited to roles traditionally receiving tips before 2025.

The House version, which passed earlier, allows an uncapped deduction. Despite differences, both aim to support service workers. Democrats like Chuck Schumer and Jackie Rosen praised the legislation, highlighting its bipartisan appeal. Cruz called it a “game-changer” for blue-collar Americans and urged swift House approval.

The bill represents a broader Republican effort to provide tax relief to working-class Americans while fulfilling Trump’s campaign promise. For millions of tipped workers nationwide, it could mean immediate and meaningful financial relief.