S. 129: No Tax on Tips Act

119th Congress · introduced 2025-01-16 · Taxation · Latest: Held at the desk.

federal

Official title

No Tax on Tips Act

Plain summary

No Tax on Tips Act This bill establishes a new tax deduction of up to $25,000 for tips, subject to limitations. The bill also expands the business tax credit for the portion of payroll taxes an employer pays on certain tips to include payroll taxes paid on tips received in connection with certain beauty services. Under the bill, the new tax deduction for tips is limited to cash tips (1) received by an employee during the course of employment in an occupation that customarily receives tips, and (2) reported by the employee to the employer for purposes of withholding payroll taxes. (Under current law, an employee is required to report tips exceeding $20 per month to their employer.) Further, an employee with compensation exceeding a specified threshold ($160,000 in 2025 and adjusted annually for inflation) in the prior tax year may not claim the new tax deduction for tips. Finally, the bill expands the business tax credit for the portion of payroll taxes that an employer pays on certain tips to include payroll taxes paid on tips received in connection with barbering and hair care, nail care, esthetics, and body and spa treatments. (Under current law, an employer is allowed a business tax credit for the amount of payroll taxes paid on certain tips received by an employee in connection with providing, delivering, or serving food or beverages.)

Congressional Research Service summary (Introduced in Senate), quoted unchanged (nonpartisan). Read the source.

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What does this mean? (plain words)

Official text

No Tax on Tips Act

Source: Congressional Research Service summary (Introduced in Senate)

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Officials and money

Sponsor: Sen. Cruz, Ted [R-TX] · 8 cosponsors

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Words on this page, explained (1)

Bill: A proposed law. It becomes law only if it passes the legislature and is signed by the president or governor (or a veto is overridden).

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Sources

Congressional Research Service summary (Introduced in Senate)
Congress.gov
Data: GovInfo BILLSTATUS bulk data (Library of Congress), BILLSTATUS-119s129.xml <https://www.govinfo.gov/bulkdata/BILLSTATUS/119/s>

Record fed-us-cong119-s129 · catalog fed-us-congress-bills-cong119 · updated 2026-11-03 by psicol fed-bills