Story perspectives

Trump's Tax Act Boosts Refunds for Tip Earners

10/18/2025

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Summary

Story summary

The One Big Beautiful Bill Act, signed by Trump in July 2025, retroactively affects tax year 2025.
It enables certain taxpayers, especially tip and overtime earners, to receive larger refunds in 2026.
Michigan mirrors these changes, exempting tips and overtime from state tax for 2026-2028, costing about $670 million annually.
Experts caution that only a small share of taxpayers will benefit, despite the law's record-keeping requirements, especially in hospitality.

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Story summary

The One Big Beautiful Bill Act, signed by Trump in July 2025, retroactively affects tax year 2025.
It enables certain taxpayers, especially tip and overtime earners, to receive larger refunds in 2026.
Michigan mirrors these changes, exempting tips and overtime from state tax for 2026-2028, costing about $670 million annually.
Experts caution that only a small share of taxpayers will benefit, despite the law's record-keeping requirements, especially in hospitality.