Tax cut provisions in the Republican-backed One Big Beautiful Bill (OBBB) would mean a reduction in taxes for workers who earn their income through tips.
The House-passed version of the legislation from the OBBB eliminates federal income taxes on tips for those working jobs that traditionally survive on tips, as long as they’re making less than $160,000 in 2025.
This was tweaked by the Senate Finance Committee, which passed a modified version on June 23, capping tip income deductions at $25,000 and phasing them out for workers with an income of more than $150,000.
In both versions of the bill, the measure would apply through 2028, and the final draft from the Senate specified that this applies not just to cash tips but also those charged to credit cards, or any from employee tip-sharing arrangements….