A Republican-led bill to exempt tipped wages from federal income tax may gain momentum, thanks to a few Democrats. The No Tax on Tips Act was introduced by Senator Ted Cruz (R-Tex) and has mostly received support from Republicans. But Senators Catherine Cortez Masto (D-Nev) and Jacky Rosen (D-Nev) announced they’re backing the bill, primarily because their state has the highest concentration of tipped workers. The legislation would exempt cash, check, and credit and debit card tips from federal income tax. Eligible taxpayers would be allowed to claim a 100% above-the-line deduction for tipped wages when filing their tax returns. The bill’s chances for passage are uncertain.
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