The National Restaurant Association sees President Trump’s massive “One, Big, Beautiful Bill” as a win for restaurant operators.
The sprawling legislation moves to the Senate after a narrow passage along party lines in the House on Thursday. While some changes are expected, Congressional leaders are gunning to get the final bill to Trump’s desk by July 4.
Included is the long-promised “No Tax on Tips” and “No Tax on Overtime” provisions, which will impact an estimated 13 million hourly workers across the restaurant industry.
In a “real world” example offered by the House Ways and Means Committee, a single mother working as a waitress would save $3,410 from not having to pay federal taxes on tips or overtime, though that estimate includes the standard deduction, as well as a Child Tax Credit for her (two) children, and a car loan interest deduction.
“The inclusion of the No Tax on Tips and No Tax on Overtime provisions recognizes the value of our dedicated workforce,” said Michelle Korsmo, president and CEO of the National Restaurant Association, in a statement. “More than 2 million tipped servers and bartenders stand to benefit, while the overtime measure rewards the commitment of over 13 million hourly team members across the sector.”
Details, however, are still unclear. The tip and overtime provisions would be in effect from 2026 to 2028. The Trump Administration will reportedly be publishing a list of qualifying occupations within 90 days of the bill signing. Only tips reported to employers and noted on a worker’s W-2 will qualify. Social Security and Medicare taxes would still be collected, as well as state and local taxes.
And some critics note that about a third of tipped workers make too little to even owe taxes. And many of those workers will likely be hurt more by cuts to Medicaid, which are also a part of the reconciliation bill.
Employers, however, will likely see some key benefits from the legislation, including the 199A qualified business income deduction, as well as full expensing of capital investments, and the reinstatement of depreciation and amortization in calculating business interest expenses, Korsmo said.
“These measures are crucial for helping businesses have the working capital they need to cover payroll, manage rising supply costs and stay competitive,” she said.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.