06-07-2025
- Business
- Wall Street Journal
Trump Promised ‘No Tax on Tips.' Then Came the Fine Print.
Many service workers are eagerly awaiting no longer paying taxes on their tips. Yet the fine print in Republicans' new law could limit savings for some waiters, bartenders and others.
Among the particulars restricting the reach of the measure: Only the first $25,000 in tips are free from income taxes. Tipped workers will still face the 7.65% combined payroll taxes that fund Social Security and Medicare. And workers won't be able to benefit if federal officials say their type of service job doesn't qualify.
