No Tax on Tips: Real, Targeted Relief for the Working Class

WASHINGTON, D.C. - No Tax on Tips is allowing America's tipped workers to keep more of their hard-earned money instead of forking it over to the IRS. The provision will cut taxes, on average, by $1,300 for tipped workers and contribute to the largest tax refund season in American history. Over 3.5 million tipped taxpayers have already benefited from this new tax relief. Overall, nearly half of all taxpayers who have filed as of March 10 have claimed at least one of the new tax cuts in the Working Families Tax Cuts.

"President Trump knew working-class families, many of them tipped workers, were hit hardest by the inflation crisis caused by Joe Biden's $10 trillion spending spree. That's why he promised and Republicans in Congress delivered No Tax on Tips in the Working Families Tax Cuts. Millions of tipped workers, like waitresses, delivery drivers, handymen, electricians, and barbers, will get a $32 billion tax cut just from No Tax on Tips," said Ways and Means Committee Chairman Jason Smith (MO-08). "The working class, not billionaires, are the ones who benefit from No Tax on Tips. When I was traveling in my district, I met a waitress who is getting a $10,000 tax refund from all the different provisions in the Working Families Tax Cuts, including No Tax on Tips. At a Ways and Means field hearing in Las Vegas, a restaurant server shared that No Tax on Tips will give him enough extra cash in his pocket to cover his power bill, and a DoorDash driver from Nevada testified that she will now be able to afford to visit her grandchildren in Missouri. No Tax on Tips is real money for real Americans. It's a shame that every single House Democrat voted against this new deduction for hard-working tipped workers, and voted to hike the taxes of every single American by 21 percent."

At a July field hearing, the Ways and Means Committee heard directly from Americans about how they plan to use the tax relief from No Tax on Tips:

Sharon Simmons, Nevada DoorDash driver: "That's why I'm very excited that Congress took action to include Dashers and other independent contractors in the no tax on tips. For someone like me, that means hundreds or potentially thousands of dollars that stay in my pocket every year. I plan to use these tax savings to cover follow-up medical visits for my husband and to travel to Missouri to see my mom, my kids and my grandchildren. No tax on tips will literally allow me to see my family more often."

Patrick Wrona, Nevada server: "Regardless of where anybody I work with stands politically, they're all excited about this. We talk about it at work. I don't know a single person that doesn't want more money in their pocket. What it equates to in real dollars is approximately what I would pay for energy at my house. It's basically like my energy bills just got taken care of for the year."

No Tax on Tips Puts More Money Back Into the Pockets of Working-Class Americans:

• No tax on tips provides an average $1,300 tax cut.
• Millions of tipped Americans will receive $32 billion in total tax relief from this pro-workers tax policy.
• Tipped workers may deduct up to $25,000 of annual tips for single workers earning up to $150,000 or $300,000 for a couple.
• Over 3.5 million taxpayers, so far, have claimed the No Tax on Tips deduction on their tax returns, according to the latest U.S. Treasury data.
• Click here for a list of the professions eligible for No Tax on Tips.

How the Working Families Tax Cuts Deliver for Working-Class Americans:

• No tax on overtime delivers an average $1,400 tax cut.
• The standard deduction is increased by $1,500 per family to $31,500.
• Married seniors will get a $12,000 deduction for their Social Security benefits.
• The Child Tax Credit expands to $2,200 and is permanently indexed for inflation, so the credit never loses value.
• $1,000 deposit for all newborns in new Trump Accounts for all children up to the age of 18. Raises annual real wages by $7,200 per worker.
• A family of four with two children earning $73,000 has zero federal income tax liability.
• Increases annual take-home pay for a typical family with two children by $10,900.