Note: Now that the No Tax on Tips measure has been signed into law, the new tax deduction for cash tips takes effect for the 2025 tax year. That means eligible workers could claim the deduction when they file their taxes in early 2026 for income earned in 2025. Despite the excitement over this change, there are some things the OBBBA doesn’t cover.

Workers earning "midrange" pay can still see meaningful savings. A warehouse supervisor earning $60,000 with $10,000 in overtime could take off a couple of thousand dollars from their federal tax bill, while a hotel bartender making $45,000 and $5,000 in tips could get all of the federal taxes withheld from their tips.