In a rare display of bipartisan unity, the Senate on Tuesday unanimously approved a bill to eliminate federal income taxes on tips, advancing the measure to the House. The legislation, sponsored by Sen. Jacky Rosen (D-Nev.), would allow tipped workers to deduct up to $25,000 of tip income from their tax returns starting in 2025. Those earning over $160,000 annually would be excluded.
The bill passed just hours after clearing the Senate Finance Committee and drew support across party lines. The idea gained traction during the 2024 presidential race, when both Donald Trump and Kamala Harris expressed support for ending tip taxation.
Despite the win, Rosen cautioned against folding the proposal into Trump’s sweeping “One Big Beautiful Bill,” which also includes contentious changes to Medicaid and SNAP.
“We shouldn’t force working families to choose between health care and keeping their tips,” Rosen said. She urged lawmakers to pass the tip tax relief independently, not as part of a broader partisan package.
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