Hammond Backs Trump’s “No Tax on Tips” for Illinois Working Families

With tax filing season underway, State Representative Norine Hammond is backing President Trump's "No Tax on Tips" for Illinois working families.

Hammond is sponsoring House Bill 4877 to create an Illinois income tax deduction for tips and overtime pay, similar to the federal tax deduction implemented by President Trump and the Republican Congress last year.

The No Tax on Tips and No Tax on Overtime provisions were passed as part of the "One Big, Beautiful Bill." Both took effect in tax year 2025 and expire at the end of 2028. No Tax on Tips is capped at $25,000 per year, while No Tax on Overtime is capped at $12,500 per year.

The State of Illinois has opted out of the No Tax on Tips and No Tax on Overtime deductions. This means that tips and overtime pay are still subject to the full 4.95% state income tax.

"Illinois working families continue to face significant affordability challenges made worse by Governor Pritzker and the Democratic majority in Springfield," Rep. Hammond said. "Pritzker chose partisan politics over providing meaningful tax relief for Illinois workers. From the young mother waiting tables to make ends meet to the factory worker putting in overtime, working families have been denied this essential relief by Illinois Democrats. I'm proud to stand with President Trump in support of our working families and I urge Gov. Pritzker to do the right thing and pass 'No Tax on Tips and Overtime.'"

According to the U.S. Department of Labor, over 198,000 tipped workers are employed in Illinois. These workers, who often work in the service industry, earn a subminimum cash wage of $9.00 per hour, which is lower than the standard state minimum wage of $15.00. They rely on tips to make up the difference.

"I will continue to advocate for real solutions that address affordability by reining in out-of-control government spending, cutting taxes for working families and seniors, and opposing Pritzker's tax hikes. Illinois families deserve real relief, not another bill to pay," Rep. Hammond concluded.