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In a rare show of bipartisan unity, the U.S. Senate passed the “No Tax on Tips Act” on Tuesday, endorsing a proposal backed by President Donald Trump to give working Americans a tax break on reported cash tips. The bill, which passed by unanimous consent, now moves to the House of Representatives, where Republican leaders are expected to fast-track its approval.
The legislation would allow a tax deduction of up to $25,000 for cash tips reported by employees to their employers for payroll withholding. The benefit is limited to workers earning $160,000 or less in 2025, with that income cap set to rise with inflation in future years.
Introduced in January by Sen. Ted Cruz (R-TX), the bill gained support across party lines — notably from Nevada’s Democratic senators Jacky Rosen and Catherine Cortez Masto. Nevada has the highest concentration of tipped workers in the nation, many of them in the state’s hospitality and service industries.
“Nevada has more tipped workers per capita than any other state,” Rosen said on the Senate floor. “This bill would mean immediate financial relief for countless hardworking families. ‘No Tax on Tips’ was one of President Trump’s key promises to the American people, which he unveiled in my state. And I am not afraid to embrace a good idea, wherever it comes from.”
The use of unanimous consent — a procedural move that allows a bill to pass if no senator objects — was an unexpected but effective strategy. While often used for uncontroversial matters, it is rarely applied to consequential tax legislation. That no senators blocked the move signals a strong political consensus, even during a period of deep partisanship.
Sen. Cruz, the lead Republican sponsor, praised the move and highlighted the bill’s significance.
“Whether it passes free-standing or as part of a bigger bill, one way or another, ‘No Tax on Tips’ is going to become law and give real relief to hardworking Americans,” Cruz said. “I commend Democrats and Republicans for coming together on this common-sense policy.”
In the House, GOP leaders may choose to pass the bill as part of a larger Trump-aligned tax package, or move it independently to secure swift passage. The latter option could allow Republicans to lower the total cost of the broader tax plan or shift spending priorities.
Despite sharp divisions over Trump’s broader economic agenda, many Democrats embraced this aspect of it — particularly those representing states with large service economies.
Senate Minority Leader Chuck Schumer (D-NY) also endorsed the bill’s passage, crediting Rosen for her leadership.
“Working Americans — from servers to bartenders, delivery drivers and everything in between — work hard for every dollar they earn,” Schumer said in a statement. “They are the ones who deserve tax relief, not the ultra-rich.”
The bill could have a significant impact on millions of Americans who rely on tips as a major part of their income — especially in restaurant, hospitality, and gig economy jobs. If passed by the House and signed into law, it would fulfill one of Trump’s 2024 campaign promises, potentially boosting his appeal with working-class voters ahead of the 2025 economic policy rollout.
