Senate unexpectedly passes the 'No Tax on Tips Act' in a unanimous vote

In a surprise move, the Republican-led Senate quickly passed the "No Tax on Tips Act" on Tuesday, giving its official stamp of approval to an idea that has gained traction since President Donald Trump campaigned on it last year.

The legislation would create a tax deduction worth up to $25,000 for tips, limited to cash tips that workers report to employers for withholding purposes on payroll taxes. The tax break would also be restricted to employees who earn $160,000 or less in 2025, an amount that will rise with inflation in coming years.