Republicans proposed offering a tax break to tipped workers, as part of a package of tax cuts the Senate Finance Committee unveiled Monday. GOP lawmakers are trying to pass their multitrillion-dollar megabill in coming weeks.
The Senate measure — which aims to fulfill a “no tax on tips” campaign pledge by President Donald Trump — is broadly similar to a provision that House GOP lawmakers passed in May as part of a domestic policy bill.
In both versions, the tax break is structured as a deduction available on qualified tips. The Senate legislation defines such tips as ones that are paid in cash, charged or received as part of a tip-sharing arrangement.
Taxpayers — both employees and independent contractors — would be able to claim it from 2025 through 2028. Filers could take advantage whether they itemize deductions on their tax returns or claim the standard deduction.
However, the Senate proposal is different from the House version in two key ways, Matt Gardner, senior fellow at the Institute on Taxation and Economic Policy, wrote in an e-mail.
