You are currently viewing How ‘No Tax on Tips’ Will Affect Waiters, Drivers and Diners

The budget bill approved by the House promises to benefit many food workers, but some details are still unclear.

As a slogan in last year’s presidential campaign, “no tax on tips” was short, memorable and effective.

As tax policy, it is more complex.

On Thursday, the House passed a domestic spending bill that includes a provision to to give tipped workers a tax break on gratuities. following through on a vow made by both President Trump and former Vice President Kamala Harris. The bill faces changes before it reaches Mr. Trump’s desk, but the Senate has already voted unanimously for a No Tax on Tips measure.

The new bill will make the change effective from 2026 to 2028. How will it affect food-industry workers and diners? Here’s what we’ve learned from interviews with tax lawyers, hospitality professors and industry groups:

How are restaurant employees currently taxed on tips?

The federal tax code requires that every

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