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Promise · Taxes
End taxes on tips
_(3x4).jpg%2F500px-Official_Presidential_Portrait_of_President_Donald_J._Trump_(2025)_(3x4).jpg&w=3840&q=75)
Donald Trump said, as a candidate
“And for those hotel workers and people that get tips, you're gonna be very happy. Because when I get to office, we are going to not charge taxes on tips, people making tips. We're not going to do it. And we're gonna do that right away, first thing in office because it's been a point of contention for years and years and years.”
Current rating: Compromise
Compromise
Rated Jul 4, 2025
Rated by AI-assisted research
Next review Jan 2026
Why we rated it this way
At a June 2024 rally, Trump said that once in office he would stop charging taxes on tips and that "this will be the end of it." The One Big Beautiful Bill Act (H.R. 1), which he signed on July 4, 2025 as Public Law 119-21, created a federal income tax deduction for qualified tips of up to $25,000 a year. The deduction is reduced by $100 for every $1,000 of modified adjusted gross income above $150,000 ($300,000 for joint filers). It covers tax years 2025 through 2028 and then ends unless Congress extends it. It applies only to voluntary tips in occupations on a Treasury list (more than 70 occupations, finalized in April 2026); the law also excludes tips earned in specified service businesses, though the IRS has suspended that limit for workers in listed occupations until it issues separate rules. It requires a Social Security number and, for married people, a joint return. The deduction does not remove Social Security and Medicare payroll taxes, which generally still apply to tips under existing rules.
This is rated compromise rather than kept because the law delivers a narrower version of what was promised, with Trump's support. The deduction covers every tax year of his term. But the promise was to stop charging taxes on tips, and payroll taxes on tips are unchanged. Workers who owe no federal income tax get little or no direct benefit; the Yale Budget Lab estimated that 37 percent of tipped workers had no federal income tax liability in 2022, before credits; the break is also temporary rather than "the end of it." It is not rated in progress because the law is enacted and the deduction was claimed on 2025 tax returns.
“Compromise” means: part of the promise happened, part did not.
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The evidence
Votes, bills, laws and statements related to this promise, newest first.
Showing 5 of 5 items
- Supports
Executive action
Final rule on tipped occupations published
Treasury and the IRS announced final regulations (T.D. 10044) on April 10, 2026; the rule was published in the Federal Register on April 13 and took effect June 12. It lists more than 70 occupations whose tips qualify for the deduction, defines a qualified tip, and applies to tax years 2025 through 2028.
- Contradicts
Law
Payroll taxes still apply and the deduction expires after 2028
The law ends only federal income tax on qualified tips, within a cap and income limits, and only for tax years through 2028. It does not remove Social Security and Medicare payroll taxes, which generally still apply to tips, so workers who owe no federal income tax get little or no direct federal income-tax benefit. The Yale Budget Lab estimated that 37 percent of tipped workers had no federal income tax liability in 2022.
- Supports
Law
Trump signs deduction for qualified tips into law
Section 70201 of Public Law 119-21 lets workers deduct up to $25,000 a year in qualified tips from federal taxable income for 2025 through 2028, whether or not they itemize.
- Supports
Vote
House agrees to the Senate's version of H.R. 1
The House voted 218 to 214 to concur in the Senate amendment, sending the bill, including the qualified tips deduction (Sec. 70201), to the President.
- Supports
Vote
Senate passes H.R. 1 with the tips deduction
The Senate passed its amended version of H.R. 1 50 to 50, with the Vice President breaking the tie. That version, which the House then accepted and the President signed, contains the qualified tips deduction (Sec. 70201).
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