Overview

• The U.S. Senate passed the 'No Tax on Tips Act' through unanimous consent, a rare procedural move for substantive legislation.
• Introduced by Sen. Ted Cruz and championed by Sen. Jacky Rosen, the bill allows tipped workers to deduct up to $25,000 in reported tips annually from federal income taxes.
• Eligibility for the deduction is limited to employees earning $160,000 or less, with the income threshold adjusted annually for inflation.
• The Senate version of the bill differs from the House GOP's proposal by capping the deduction and making it a permanent part of the tax code.
• The legislation now moves to the House, where lawmakers must decide whether to pass it as a standalone bill or retain it within a broader Republican budget package.