Understanding the “No Tax on Tips Act”: Strategic Considerations for Employers and Tipped Employees

On May 20, 2025, the U.S. Senate passed the No Tax on Tips Act (S.129) with unanimous bipartisan support. Now under review in the House of Representatives, this legislation seeks to exempt up to $25,000 in reported tip income from federal income tax, while expanding employer tax credits on payroll taxes associated with those tips. […]