Trump’s ‘big beautiful’ bill eliminates taxes on tips—here’s who benefits most | No Tax on Over…

Explore the latest developments concerning Trump's 'big beautiful'.

Trump's 'big beautiful' bill eliminates taxes on tips—here's who benefits most

President Trump's pledge to end taxes on tips is one step closer to becoming law.

On Tuesday, Senate Republicans narrowly approved their version of President Donald Trump's multi-trillion-dollar tax and spending package in a 51–50 vote, with Vice President JD Vance casting the tie-breaking vote.

One key provision in the bill would create an above-the-line deduction for tips earned by workers in occupations that traditionally receive tips. That means a bartender, for instance, would be able to deduct the total amount of their tips from their taxable income in a given year.

A few restrictions apply, however. The approved Senate version phases out for individuals making more than $150,000 a year, or $300,000 a year for joint filers, and it expires after 2028. The deduction is also capped at $25,000.

No Tax on Overtime? W-2 Reporting Changes Likely Coming

Jennifer keeps readers current on Payroll news, covering topics such as employment taxes, fringe benefits and the Fair Labor Standards Act. She brings over 20 years of experience to the HRMorning staff.

As the One Big Beautiful Bill Act moves forward in Congress, it’s looking more likely that overtime pay won’t be subject to tax.

Of course, nothing has been finalized yet, but legislators have provided some details worth noting.

On June 16, 2025, the Senate Finance Committee released legislative text, intended for inclusion in the Senate’s version of the budget reconciliation bill.

The committee’s proposal came about three weeks after the House passed HR 1, outlining many tax-related measures, such as making overtime compensation non-taxable income.

Senate passes Trump's Big Beautiful Bill, including no tax on tips. When will it start in MA?

The Senate passed President Donald Trump’s “Big Beautiful Bill” on July 1 after hours of debate, finally giving the president his much sought after legislative victory.

The 887-page bill has the potential to impact millions of Americans with provisions ranging from extended tax cuts, boosted spending for the military and border security and major cuts to Medicaid.

It also includes new federal tax breaks for workers who earn tips and overtime pay, a measure that has also been filed in the Massachusetts legislature.

Trump celebrated the bill's passage, saying there is "something for everyone," according to reports.

But it’s not over yet: the bill will next head back to the House for approval on its changes.

For more detailed information and comprehensive insights, explore recent updates concerning Trump's 'big beautiful'.

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