Trump calls for no tax on tips, no tax on overtime: What we know
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WASHINGTON - During President Donald Trump’s address to Congress, he called to end taxes on overtime pay, as well as other things like tips and Social Security.
"I'm calling for no tax on tips, no tax on overtime and no tax on Social Security benefits for our great seniors," Trump said Tuesday.
Trump calls for no tax on tips, overtime, Social Security benefits
The backstory:
Trump wants the Republicans who control Congress to approve a massive bill that would extend tax breaks, which he secured during his first term but are expiring later this year, while also cutting spending on federal programs and services.
US President Donald Trump, bottom right, during a joint session of Congress in the House Chamber of the US Capitol in Washington, DC, US, on Tuesday, March 4, 2025. Donald Trump's primetime address Tuesday night from Capitol Hill, billed as a chronic
During his campaign, he also pledged to end taxes on overtime pay, tips and Social Security.
Trump’s no-tax-on-overtime proposal
What we know:
Trump has said he would support legislation to eliminate taxes on overtime pay, saying it gives people "more of an incentive to work." "It gives the companies a lot, it’s a lot easier to get the people," he said in September at a campaign rally in Tucson, Arizona.
Trump discusses 'no tax on tips' in Las Vegas
President Trump delivered remarks Saturday in Las Vegas, Nevada, where he discussed his "no tax on tips" plan.
What we don't know:
Further details about Trump’s proposal have not been shared, including whether it would indeed cut both income tax and payroll taxes on overtime pay.
What they're saying:
"The people who work overtime are among the hardest working citizens in our country and for too long, no one in Washington has been looking out for them," Trump said during his Sept. 12, 2024, rally.
Trump’s no-tax-on-tips proposal
What we know:
In June, Trump originally announced his plan to exclude workers’ tips from federal taxes, saying he got the idea from a waitress at his Las Vegas hotel.
"To those hotel workers and people who get tips, you are going to be very happy, because when I get to office we are going to not charge taxes on tips, people making tips," Trump said, adding: "We’re going to do that right away, first thing in office."
What we don't know:
Further details have not officially been unveiled about the proposal, including whether he wants to exempt tips from just income taxes or from the payroll tax as well.
Trump’s no-tax-on-Social-Security proposal
What we know:
Trump pledged throughout his campaign for tax cuts for older Americans, posting on Truth Social in July that "SENIORS SHOULD NOT PAY TAX ON SOCIAL SECURITY!"
Dig deeper:
The challenge is that taxes on Social Security benefits help to pay for the program. The loss of revenue could mean that Social Security would be unable to pay out its full benefits in 2033, two years ahead of the current estimate, according to Brendan Duke of the liberal Center for American Progress.
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According to the Social Security Administration, recipients must currently pay federal income taxes if combined income — 50% of the benefit amount plus any other earned income — is higher than $25,000 annually if filing individually, or $32,000 if filing jointly.