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One month after Donald Trump<\/strong><\/a> took office, one of his proposals to end certain taxes was approved by House Republicans in a budget resolution. The approval allows the GOP to use legislative reconciliation, which can help avoid a filibuster from Senate Democrats and enable a quicker passage. Last year, Trump promised voters that he would end taxes on overtime pay, tips and Social Security. Former Vice President Kamala Harris<\/strong><\/a> also supported this, endorsing the proposal in August 2024. Now that House Republicans found a way to propel the resolution forward, when can hospitality workers expect the tax eliminations to start?<\/p>\n Below, learn more about the proposal to end taxes on tips and overtime pay.<\/p>\n The bill does not focus only on ending taxes on tips and overtime pay. However, it\u2019s a major portion of the proposal and is supported by Americans who work in the hospitality industry, such as bartenders, servers and valets.<\/p>\n The current tax code withholds a worker\u2019s tips of $20 or more in a month. Tips include cash and\/or debit and credit card charges to one employee. Employers must, in turn, withhold income taxes in addition to the employee\u2019s share of Medicare and Social Security taxes.<\/p>\n As for overtime standards in America, the Fair Labor Standards Act indicates that non-exempt employees receive time-and-a-half compensation while working more than 40 hours in a week. Current federal income taxes treat overtime as taxable wages, and employees see those withholdings on their paystubs. Salaried employees are not eligible for overtime pay or tips in a workplace.<\/p>\n If the proposal is eventually signed into law, workers can benefit by taking home a larger amount of their total pay.<\/p>\n Since the bill has yet to pass through the Senate, there is no clear timeframe when the tax cuts could begin. Earlier this year, Trump spoke<\/a> to a crowd of supporters in Nevada, vowing the \u201cno tax on tips\u201d move would be enacted during his presidency.<\/p>\n \u201cSo, if you\u2019re a restaurant worker, a server, a valet, a bellhop, a bartender or one of my caddies,\u201d Trump began before joking, \u201cI go through caddies like candy; if I play badly, I always blame my caddy.\u201d He then added, \u201cYour tips will be 100 percent yours. Won\u2019t that be nice?\u201d<\/p>\n Since the resolution has not passed through the Senate yet, it\u2019s unclear when or if any tax cuts could happen this year. The resolution does not specifically refer to a tax on Medicaid, per Newsweek<\/em><\/a>. However, it would instruct the House Committee on Energy and Commerce \u2014 which has jurisdiction over Medicaid \u2014 to come up with $880 billion worth of cuts.<\/p>\n House Minority Leader Hakeem Jeffries<\/strong> has openly criticized the resolution, telling reporters, \u201cThe House Republican budget resolution will set in motion the largest Medicaid cut in American history.\u201d<\/p>\n \n\t\t<\/div>\nWhat Is the No Tax on Overtime & Tips Bill?<\/h2>\n
When Does No Tax on Overtime & Tips Start?<\/h2>\n
Will There Be Medicaid Cuts in 2025?<\/h2>\n