Texas Republican Senator Ted Cruz announced the unanimous Senate passage (100-0) of his “No Tax on Tips Act,” delivering a major legislative win for former President Donald Trump. The bill, which was a Trump campaign promise, aims to exempt tips from federal income taxation, helping millions of American workers who rely heavily on gratuities.

The bill allows full deductions for tips—including cash, card payments, and shared tips—on federal tax filings. Cruz highlighted its significance for blue-collar workers living paycheck-to-paycheck and emphasized the bipartisan support it has received. He now urges the House of Representatives to pass the bill so it can be signed into law by the president.

This legislation is part of a broader Republican tax reform initiative aimed at reducing burdens on working-class Americans. Cruz emphasized that “guardrails” have been included to ensure only legitimate tipped workers benefit from the new tax exemption. He has been a consistent advocate for tax relief, including his role in the 2017 tax cuts and the USMCA trade deal.

The Senate bill is largely similar to the House version passed earlier this year. However, it introduces a few key differences. The Senate plan caps the tax deduction at $25,000 per year, while the House version leaves it uncapped. Additionally, the Senate includes income phase-outs, reducing the deduction’s value above $150,000 for individuals and $300,000 for married couples.

Both versions of the bill restrict the benefit to jobs that regularly earned tips before the end of 2024. The legislation directs the Treasury Secretary to issue a list of qualifying occupations within 90 days of passage, to ensure clarity and compliance.

The measure has received bipartisan praise, including support from top Democrats like Senators Chuck Schumer and Jackie Rosen, signaling strong momentum as it moves to the GOP-controlled House for final approval.