The "no tax on tips" provision within the Senate version of the One Big Beautiful Bill Act allows tipped workers to deduct tip income from their federal taxable income, up to $25,000 annually. The deduction phases out for individuals earning more than $150,000 and couples earning over $300,000.

House Minority Leader Hakeem Jeffries, D-N.Y., speaks during a news conference after passage of the budget reconciliation package of President Donald Trump’s signature bill of big tax breaks and spending cuts, at the Capitol in Washington, Tuesday, July 1, 2025. (AP Photo/Mariam Zuhaib)