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No Tax on Cash Tips: New Deduction for Service Workers.

This bill introduces a new tax deduction allowing workers to subtract all reported cash tips from their taxable income. This means individuals who rely on tips, such as servers and bartenders, will no longer pay federal income tax on those reported cash amounts, directly increasing their take-home pay. These changes will take effect starting with the 2025 tax year.
Key points
All cash tips reported to an employer will be exempt from federal income tax through a new deduction.
The deduction is available to all taxpayers, whether they itemize deductions or take the standard deduction.
The law requires adjustments to tax withholding procedures to reflect this change immediately in paychecks starting in 2025.
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Expired
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Additional Information
Print number: 118_HR_8941
Sponsor: Rep. Donalds, Byron [R-FL-19]
Process start date: 2024-07-08
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Summarized by: gemini-2.5-flash-preview-09-2025
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

No Tax on Tips Act

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 118_HR_8941.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2024-07-08.

What are the main provisions?

Key points include:

  • All cash tips reported to an employer will be exempt from federal income tax through a new deduction.
  • The deduction is available to all taxpayers, whether they itemize deductions or take the standard deduction.
  • The law requires adjustments to tax withholding procedures to reflect this change immediately in paychecks starting in 2025.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Donalds, Byron [R-FL-19].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-25.

CATEGORIES

Taxes Labor