Senate Passes No Tax on Tips Act for Tipped Workers
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The Senate unanimously passed the No Tax on Tips Act, fulfilling a campaign promise by both President Trump and Vice President Harris. This act, slated for inclusion in the "One, Big, Beautiful" budget bill, would exempt tipped workers from paying taxes on gratuities from 2026-2028. The legislation defines "cash tips" broadly, including credit/debit card tips and those via business electronic systems. The impact on tips received through apps like Venmo and PayPal, and the treatment of service charges, remain unclear.
The Senate unanimously passed the No Tax on Tips Act, fulfilling a campaign promise by both President Trump and Vice President Harris. This act, slated for inclusion in the "One, Big, Beautiful" budget bill, would exempt tipped workers from paying taxes on gratuities from 2026-2028. The legislation defines "cash tips" broadly, including credit/debit card tips and those via business electronic systems. The impact on tips received through apps like Venmo and PayPal, and the treatment of service charges, remain unclear.
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