Summary
Congress passed a new law, supported by former President Trump, creating temporary tax exemptions for tipped workers. This law allows workers to deduct up to $25,000 in tips from their taxable income, but it applies only until 2028 unless Congress extends it.
Key Facts
- Congress approved a tax package called the One Big Beautiful Bill Act.
- Tipped workers can now deduct up to $25,000 in tips from their taxable income annually.
- This tax benefit is temporary and will end in 2028 unless Congress decides otherwise.
- Workers earning more than $150,000 annually will still have their tips taxed.
- The tax exemption applies to jobs that typically receive tips, but these jobs are not specifically listed in the law.
- The bill faced opposition, particularly due to concerns over cuts to Medicaid.
- The law could reduce health insurance coverage by over ten million people according to a government analysis.
- Both Republicans and some Democrats supported parts of the bill, despite disagreements.
