“LARGE TAX CUTS FOR WORKERS, AND NO TAX ON TIPS!”

Where it stands

Treasury: more than 6 million filers claimed the new deduction for tips on their 2025 returns, averaging more than $7,100 (as of 14 April 2026). It is a deduction from federal income tax only, so Social Security and Medicare payroll taxes still apply to tips; it is capped at $25,000, reduced above $150,000 of income ($300,000 joint), and ends after 2028.

What has happened

1. 15 July 2024Promised. Delegates at the Republican National Convention adopt the 2024 platform, which opens with twenty promises
2. 4 July 2025Legislated. Public Law 119-21 creates a federal income tax deduction for tips of up to $25,000 a year, reduced above $150,000 of income ($300,000 for joint returns), for 2025 to 2028 (section 70201), and a deduction for overtime pay (section 70202) evidence
3. 4 July 2025Legislated. Public Law 119-21 makes the 2017 law's lower income tax rates permanent (section 70101) and raises the standard deduction (section 70102) evidence
4. 15 April 2026Delivering. Treasury reports that more than 53 million filers claimed at least one of the law's new deductions on 2025 returns, including more than 6 million for tips, averaging more than $7,100 evidence

More detail

Related promises

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Every promise in 6. Tax cuts and tips