Senator Ted Cruz (R-TX) has delivered a powerful legislative victory for working Americans and President Donald J. Trump with the unanimous Senate passage of the “No Tax on Tips Act”—a pro-worker, pro-growth policy that fulfills a core promise of Trump’s second-term agenda.

The bill, which passed the Republican-controlled Senate in a stunning 100-0 vote, would exempt tipped income from federal income taxation, providing critical relief to millions of waiters, bartenders, hospitality workers, and other service industry employees across the country.

“President Trump made a promise to the American people that he would eliminate taxes on tips,” Cruz said. “In Congress, I formed a bipartisan, bicameral coalition to get that done, and in the Senate introduced the No Tax on Tips Act. Today, I went with Senator Rosen to the floor to secure Senate passage of the bill.”

Framing the legislation as a lifeline to working-class Americans, Cruz added: “This legislation will have a lasting impact on millions of Americans by protecting the hard-earned dollars of blue-collar workers, the very people who are living paycheck-to-paycheck. I urge my colleagues in the House to pass this important bill and send it to the President’s desk to be signed into law.”

The bill is a direct response to President Trump’s 2024 campaign pledge to stop the IRS from taxing tips—an idea that resonated deeply with restaurant workers and small business employees nationwide. It redefines “cash tips” to include checks, credit card, and debit card payments, and allows a 100% tax deduction for eligible gratuities on federal returns.

To prevent abuse, the bill includes clear “guardrails” to ensure that only workers who customarily earn tips—defined as those in tipped positions before the end of 2024—qualify for the benefit.

Cruz, a longtime champion of tax relief and deregulation, sees this legislation as a continuation of his successful efforts during the landmark 2017 tax reform and the USMCA trade agreement. For his work on behalf of Texas industry and pro-business policy, Cruz received the U.S. Chamber of Commerce’s Spirit of Enterprise Award.

With the Senate’s passage secured, the bill now heads to the Republican-controlled House, where it is expected to pass swiftly. GOP lawmakers have already folded similar language into broader tax reform packages working their way through committee.

According to the proposal, the tax deduction would be available from 2025 to 2028, and would apply to both itemized and standard deduction filers—making it broadly accessible.

As noted by CNBC, the Senate version differs slightly from the House proposal. The Senate version caps the annual deduction at $25,000, while the House leaves it uncapped. The Senate bill also includes income phase-outs beginning at $150,000 for individuals and $300,000 for married couples, gradually reducing the benefit to ensure it targets working-class earners.

The legislation also requires the Treasury Secretary to publish an official list of qualifying tipped occupations within 90 days of enactment, ensuring transparency and accountability.

Surprisingly, even prominent Democrats like Sen. Chuck Schumer (D-NY) and Sen. Jackie Rosen (D-NV) offered support—showing that in an era of bitter partisanship, common-sense tax relief for working people can still unite the Senate.

With strong momentum in both chambers and the full backing of President Trump, the No Tax on Tips Act is on a fast track to becoming one of the most worker-friendly tax reforms in modern history.