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Massive spending bill allows workers to deduct tip and overtime pay income from taxes through 2028
- On Thursday, the House of Representatives approved President Trump's $4.5 trillion tax and spending bill called the big beautiful bill by a 218-214 vote.
- The bill reflects Trump’s 2024 campaign promise to let workers deduct up to $25,000 of tipped income and $12,500 of overtime pay from federal taxes through 2028.
- The legislation introduces a $6,000 tax deduction aimed at seniors who are taxed on their Social Security income, which gradually phases out for individuals with earnings above $75,000 and expires in 2028.
- Tax Foundation analyst Morishaner indicated that the Senate's proposal is projected to reduce federal tax revenues by $31 billion over the period from 2025 through 2028, while the White House projects that 88% of seniors will be exempt from paying Social Security taxes under this legislation.
- The bill’s passage may raise workers’ take-home pay but its temporary caps and expiration suggest ongoing debate and state-level assessment before reintroduction.
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Newsbug.info+4 Reposted by 4 other sources
Congress passes ‘no tax on tips’ as Illinois legislator eyes policy for state
(The Center Square) – Congress passed the “one big beautiful bill” and in it a provision that temporarily exempts certain tipped income from federal taxes, a major shift from long-standing tax policy treating tips as taxable income.
Coverage Details
Total News Sources21
Leaning Left8Leaning Right3Center8Last UpdatedBias Distribution42% Left, 42% Center
Bias Distribution
- 42% of the sources lean Left, 42% of the sources are Center
42% Center
L 42%
C 42%
R 16%
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