News Summary

• In July, lawmakers passed Trump's behemoth spending bill, known as the One Big Beautiful Bill Act (OBBBA), through Congress.
• One of the provisions in the bill allows tipped workers to deduct gratuity earnings from their federal taxable income, up to $25,000 annually.
• The deduction phases out for individuals earning more than $150,000 and couples earning over $300,000.
• It applies to tax years 2025 through 2028 and does not eliminate payroll taxes for Social Security and Medicare, nor does it affect state or local tax obligations.