A bill that would eliminate taxes on tips was surprisingly approved unanimously by the Senate on Tuesday, pushing the proposal to the House.
The bill, which had just cleared the Senate Finance Committee hours before, did not face any opposition. Sponsored by Nevada Democratic Sen. Jacky Rosen, it states that tipped employees can deduct up to $25,000 of their income from their tax returns.
Those who earn at least $160,000 per year would not be eligible for the deduction in 2025.
Despite the legislative victory on Tuesday, Rosen expressed doubts about whether her bill would gain approval. A similar provision is being considered within the broader "big, beautiful bill" proposed by President Donald Trump.
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Currently, House Republicans are considering the sweeping legislation, which also includes other changes to the tax code as well as reductions in social programs such as Medicaid and the Supplemental Nutrition Assistance Program.
Rosen argues that her legislation should be approved outside of the "big, beautiful" spending bill.
"We shouldn’t be forcing working families to choose between keeping their health care or keeping their tips, which is why we want this bipartisan bill on its own – on its own – not part of a harmful, extreme budget bill," Rosen said.
The proposal to eliminate taxes on tips gained popularity during last year's presidential election when both Donald Trump and Kamala Harris said they would support such a measure.
