Tips Could Soon Be Tax-Free Thanks to New Senate Bill

In a rare moment of bipartisan agreement, the U.S. Senate unanimously passed the No Tax on Tips Act, a bill that would exempt tip income from federal taxation. The legislation aims to provide direct financial relief to millions of American service industry workers, particularly those in hospitality, food service, and delivery—jobs where tips often represent a major part of earnings. Introduced by Senator Ted Cruz of Texas and co-sponsored by Senator Jacky Rosen of Nevada, the bill emphasizes fairness for employees who work long hours yet live paycheck to paycheck.