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Eliminating income tax on reported cash tips through a new deduction.

This bill eliminates the income tax on cash tips that employees report to their employers. It introduces a new deduction allowing individuals to subtract the full amount of reported cash tips from their taxable income. This change directly benefits workers relying on tips, such as waiters and bartenders, by increasing their net take-home pay, and is scheduled to take effect starting with the 2025 tax year.
Key points
A new tax deduction is established, allowing employees to deduct 100% of reported cash tips from their income.
This deduction is available to all individual taxpayers, regardless of whether they use the standard deduction or itemize their deductions.
The tax withholding tables and procedures will be modified to account for this new deduction.
The changes apply to taxable years beginning after December 31, 2024.
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Expired
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Additional Information
Print number: 118_S_4621
Sponsor: Sen. Cruz, Ted [R-TX]
Process start date: 2024-06-20
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Summarized by: gemini-flash-latest
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_S_4621.

Which chamber initiated this legislation?

This legislation was initiated in the Senate.

When did the legislative process begin?

The process officially started on 2024-06-20.

What are the main provisions?

Key points include:

  • A new tax deduction is established, allowing employees to deduct 100% of reported cash tips from their income.
  • This deduction is available to all individual taxpayers, regardless of whether they use the standard deduction or itemize their deductions.
  • The tax withholding tables and procedures will be modified to account for this new deduction.
  • The changes apply to taxable years beginning after December 31, 2024.
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 Sen. Cruz, Ted [R-TX].

What is the latest detailed status?

The latest detailed status is: Introduced in Senate

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-30.

CATEGORIES

Taxes Labor