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Story perspectives

Federal Tip Tax Policy Aims to Aid Service Workers

12/25/2025

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Summary

Story summary

The federal 'no tax on tips' policy lets service workers deduct up to $25,000 in tips from taxable income through 2028.
The policy aims to improve recruitment and retention in hospitality post-pandemic.
Bartender Michael DiStefano relies on tips for most income, so the policy helps.
Some experts say the policy offers minimal relief to low-income workers.
New York does not extend this policy to state taxes, limiting its impact.

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Story summary

The federal 'no tax on tips' policy lets service workers deduct up to $25,000 in tips from taxable income through 2028.
The policy aims to improve recruitment and retention in hospitality post-pandemic.
Bartender Michael DiStefano relies on tips for most income, so the policy helps.
Some experts say the policy offers minimal relief to low-income workers.
New York does not extend this policy to state taxes, limiting its impact.