NEVADA — Service workers across Nevada are reacting to a sweeping new federal tax change that eliminates federal income taxes on tips up to $25,000 per year, offering a potential boost for those working in casinos, restaurants, and hotels. While many are calling the move long overdue, labor leaders are voicing concern about what the policy could cost workers in the long run.
New Federal Rule Exempts Most Tips from Taxation
The change is part of former President Donald Trump’s “Big Beautiful Bill”, a large Republican-backed legislative package that revises the federal tax code. Under the new provision, anyone making less than $150,000 annually per spouse will not pay federal income tax on tips up to $25,000.
Kim Walker, a Las Vegas-based CPA, told FOX5 Vegas that this could be “a game changer” for tens of thousands of Nevada workers:
“A large percentage of their taxable income now becomes non-taxable. It’s like getting a raise without your employer spending more.”
Valets, Bartenders, Servers Could Save Thousands
The impact is especially significant in Las Vegas, where many hospitality and service industry jobs rely heavily on tips. Tip workers at resorts, nightclubs, and transportation services are expected to benefit the most.
Tax advisors estimate the average worker in this category could save $3,000 to $5,000 annually in federal taxes. Some industry experts say the timing is critical, as rising inflation and housing costs have strained service workers since the pandemic.
Tracy Janssen of Symphony Business Services urged workers to review their tax withholdings and consult professionals:
“There’s a lot in this bill. Take a few days, then speak with your accountant. This isn’t business as usual.”
Culinary Union Cautions: Don’t Be Fooled by the Headlines
The Culinary Union, which represents over 60,000 workers in Las Vegas, welcomed the tax relief — but called the overall bill “anti-worker” in its broader scope.
In a statement reported by 8 News Now, Secretary-Treasurer Ted Pappageorge said:
“Tip workers absolutely deserve tax relief — but this is a temporary distraction. Meanwhile, billionaires get permanent cuts and essential public programs are at risk.”
The union warns that other elements of the bill could threaten worker healthcare access, union protections, and long-term economic equity.
Provision Set to Expire in 2028
Another issue drawing concern is the sunset clause. Unless extended by Congress, the “No Tax on Tips” rule will expire at the end of 2028. That leaves future workers uncertain whether this benefit will last beyond the current administration.
IRS guidance is expected in the coming months, and tax professionals recommend all tipped workers carefully track their tip income and stay updated on official rules.
Are you a service worker in Nevada affected by the new tip tax exemption? Has this helped your family or created new questions? Share your story in the comments at ChicagoSuburbanFamily.com.
