No Tax on Tips and Overtime Becomes Law — What It Means for the Hospitality Industry
The financial strain caused by federal taxes on tips and overtime pay has long been a burden for service workers and the employers who support them. In a historic bipartisan move, the “One Big Beautiful Bill” has been signed into law, delivering on promises to eliminate federal income tax on tips and overtime.
Zaller Law Group and TipHaus are proud to have supported this effort, advocating for legislation that directly improves the lives of millions of American workers and strengthens the hospitality industry. Here’s what you need to know:
1. A Landmark Win for Workers — and Bipartisan Cooperation
The “No Tax on Tips and Overtime” policy had rare bipartisan momentum:
- Donald Trump, who made it a campaign pledge.
- Kamala Harris, who voiced strong support during her own run.
- President Biden, whose administration confirmed he would sign the legislation if passed.
On Friday, July 5, 2025, the bill was officially signed into law. This is a transformative moment for the hospitality sector, acknowledging the critical role that tipped and overtime-reliant workers play in the U.S. economy.
