A Trump-backed tax plan currently advancing through Congress proposes significant changes to the federal taxation of overtime pay and tip income. Passed by the House on May 22, 2025, the “ One Big Beautiful Bill Act ” includes provisions that could allow eligible workers to exclude certain overtime earnings and tips from their taxable income., The massive Republican-backed budget bill — called "one big, beautiful bill" by President Trump — includes several new tax rules that could have a big financial impact on millions of, Nixing federal income taxes on overtime and tipped income was one of Trump's top policy promises during his 2024 election campaign, an idea that has also been embraced by Democrats., The One, Big, Beautiful Bill fulfills that promise: no taxes on tips, no taxes on overtime, no tax on auto loan interest for American-made cars, and tax relief for seniors., The Trump and Republican backed bill encompasses everything from changes in electric vehicle credits to key Trump campaign promises of no taxation on overtime or tips., On May 22, the U.S. House of Representatives passed H.R. 1, titled the “One Big Beautiful Bill Act.” Notably, the reconciliation “megabill” includes a provision to implement President Trump’s campaign pledge on “no tax on overtime,” among various legislative priorities for Republicans..