The "no tax on tips" provision within the Senate version of the One Big Beautiful Bill Act allows tipped workers to deduct tip income from their federal taxable income, up to $25,000 annually. The deduction phases out for individuals earning more than $150,000 and couples earning over $300,000.

Republican leaders worked through the night to win over holdouts as they raced to pass President Trump’s tax and spending package by their self-imposed July 4 deadline.

The Republican-controlled U.S. Senate voted on Tuesday to pass a wide-ranging tax-cut and spending bill sought by President Donald Trump, which would cut Medicaid healthcare and food assistance programs for the poor and disabled.