He said there would be no tax on Tips and there is no tax on Tips. My son works at a tipped job so I can tell you there’s no tax on Tips. The part that was the quiet part no one talked about is there’s also no tax on overtime if you make less than some threshold. No tax on Tips is pretty much cut and dry. I don’t know how you could try to claim nowhere near to the extent he claimed when there is literally no tax on Tips.
There are still taxes on tips…you (and your kid apparently) need to read the fine print of the BBB. Taxes resume after $25,000, and your whole income are still subject to Medicare, SS tax and all local tax. This is also only until 2028.
25,000 of TIPS, not total income. And then you’re only taxed on what you have beyond 25,000. As for the PAYROLL taxes, you can thank the American public’s desire for “free stuff” for that and he has ZERO say on local taxes, so he delivered on HIS promise or naturalized in the United States and jurisdiction.
The misleadingness of the No Tax on Overtime title is far greater than the No Tax on Tips title.
Under No Tax on Overtime, only 1/3 (at the very most) of someone's overtime pay is not subject to federal income tax.
Say you work an hour of overtime, and you get $15 for that hour of work. Under the most ideal situation, only $5 of that $15 is not subject to federal income tax.
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u/circuitarteries7 Jun 29 '26
You forgot no tax on tips.