July 03, 2025
If you work in hospitality—bartending, waiting tables, delivering food—you probably already know how important tips are to your income. Well, there’s some big news out of Washington: President Trump and Republicans in Congress just passed a bill that eliminates federal income tax on tips.
That means you keep more of the money you earn, plain and simple.
If you’re one of our customers taking our alcohol server or food handler training, odds are you work in a restaurant, bar, hotel, or catering. Tips aren’t a little bonus for you—they’re how you pay rent, buy groceries, and make ends meet.
Now, every dollar you get in tips is yours to keep without paying federal income tax on it. (Of course, this applies to federal taxes; state or local tax rules may still apply depending on where you live.)
This new rule recognizes that tipped workers shouldn’t be punished for the gratuities customers choose to give them.
Meet Maria, a server in a busy mid-priced restaurant.
Maria works 5 shifts a week.
She averages $150 in tips per shift.
That’s about $750 in tips each week, or roughly $39,000 in tips per year.
Under the old system:
Her tips were taxable income.
At a typical 12% federal effective rate for her income bracket, she would owe roughly $4,680 per year on those tips.
Under the new law:
✅ That $4,680 in federal tax liability on tips goes away.
✅ Maria keeps the full $39,000 in tips.
That’s an extra $90 per week in her pocket!
For many hospitality workers, that could be:
Gas money.
Utility bills.
Extra groceries.
A night out with friends.
Saving for emergencies or trips.
We train thousands of bartenders, servers, delivery drivers, and managers every year. These folks rely on tips.
This new tax change rewards hard work and puts more money back into the pockets of people who truly need it—like you.
Whether you’re just starting your hospitality career or you’ve been serving for years, this law means your hard work pays off more than ever before.
✅ This is federal tax only. State or local income tax on tips may still apply depending on where you live.
✅ You’ll still need to report your tips—but they won’t be federally taxed.
✅ Always talk to a tax professional to see how this affects your personal situation.
At LIQUORexam.com, we’re dedicated to supporting servers, bartenders, and hospitality workers through accessible, state-approved training. We know how hard you work—and we love seeing good news like this that directly benefits you.
Stay tuned for more updates that matter to the hospitality world, and keep up the great work serving your customers.
If you haven’t gotten certified yet or need a renewal, check out our affordable online courses. They’re designed to be easy, fast, and 100% online—so you can keep working and earning those tips.
