Minnesota State Wire

Pete Stauber, Representative of Minnesota, said that the Working Families Tax Cut ensures service workers retain more of their income by eliminating federal taxes on tips. The statement was made on X.

"For those in the service industry, tips are a big part of their paycheck," said Peter Allen Stauber, U.S. Representative of Minnesota's 8th Congressional District (R). "Fortunately, the Working Families Tax Cut eliminates taxes on tips for waiters, bartenders, and other service workers."

The Working Families Tax Cut, part of the One, Big, Beautiful Bill, exempts up to $25,000 in tip income from federal taxes between 2025 and 2028. Lawmakers highlighted that service workers such as servers, bartenders, and delivery drivers could save as much as $1,700 annually. This measure is considered a key component of tax relief for working-class families, according to the House Ways and Means Committee.

TIME reports that an estimated 4–5% of U.S. workers earn income in tipped occupations. This group includes millions in food service, hospitality, delivery, and beauty services. The share emphasizes the broad impact of making tip income tax-free on sectors where gratuities are central to wages.

Under previous federal law, all tip income was taxable, reducing take-home pay for millions of service industry workers. According to the IRS, the new policy allows tipped employees to exclude up to $25,000 in gratuities from taxable income. This change turns those dollars into direct savings depending on tax bracket.

Stauber has represented Minnesota’s 8th District since 2019 and serves on the House Natural Resources, Transportation and Infrastructure, and Small Business committees. His priorities include supporting mining, manufacturing, and small businesses while expanding economic opportunities in northern Minnesota.