Majority Leader | Research | The Leader Board | THE NEWSR...Skip to primary navigation Skip to content×Close THE NEWSROOMRemarks Press Releases The Leader Board Op-Eds Videos SENATE RESOURCESRepublican Senators Committees Congressional Record Congress.gov Senate Floor Webcast ABOUT LEADER THUNE×Close THE NEWSROOMRemarks Press Releases The Leader Board Op-Eds Videos SENATE RESOURCESRepublican Senators Committees Congressional Record Congress.gov Senate Floor Webcast ABOUT LEADER THUNExxsearchxMENUFacebookXInstagramFacebookXInstagramVisit Leader Thune's South Dakota Site Here THE NEWSROOMRemarks Press Releases The Leader Board Op-Eds Videos SENATE RESOURCESRepublican Senators Committees Congressional Record Congress.gov Senate Floor Webcast ABOUT LEADER THUNExxsearchxMENUHomeTHE NEWSROOMThe Leader Board02.10.26Washington, D.C., and Several Blue States Seek to Deny Working Families Their Tax CutsDemocrat Jurisdictions Around the Country Are Refusing to Adopt Key Provisions of the Working Families Tax Cuts Law, Meaning Their Residents Will Pay Higher Taxes THE D.C. COUNCIL HAS DECIDED NOT TO IMPLEMENT POPULAR PROVISIONS OF THE WORKING FAMILIES TAX CUTS LIKE NO TAX ON TIPS AND OVERTIME“Republicans passed the Working Families Tax Cuts so that every working family, regardless of where they live, can have more money and new opportunities to get ahead. It is outrageous that Democrat politicians would try to stop seniors, tipped workers, and people who work overtime from receiving this historic tax relief.” – Senate Majority Leader John Thune (R-S.D.)“Workers receiving their first paychecks of 2026 are finding them bigger than ever thanks to the Working Families Tax Cuts…” (U.S. Senate Committee on Finance: Working Families Tax Cuts Bring Bigger Paychecks – 1/16/26)Tipped wages, “up to $25,000 for qualified tips,” are no longer taxed, benefiting millions of American service workers. (U.S. Senate Committee on Finance: Crapo Highlights Tax Wins for Hardworking Americans and Main Street – 6/28/25)Overtime wages, “up to $12,500 for hourly workers who work overtime and keep America running,” are no longer taxed, increasing labor productivity and giving millions of hourly workers more take-home pay. (U.S. Senate Committee on Finance: Crapo Highlights Tax Wins for Hardworking Americans and Main Street – 6/28/25)“The standard deduction is taken by the vast majority of filers. Congress boosted it by $750, to $15,750 for single filers; and by $1,500, to $31,500 for married couples filing jointly.” (CNN: Why federal tax refunds may be bigger than usual – 1/26/26)“Several states are embracing federal tax relief by aligning with or adapting to the [Working Families Tax Cuts]. Whether through automatic conformity, new legislation, or hybrid approaches, these states are finding ways to reduce tax burdens on tips, overtime, and bonuses while balancing budget impacts.” (Thompson Reuters: State lawmakers’ dilemma – To conform or to decouple with OBBBA? – 11/6/25)On the other hand, “[s]everal states have made clear they do not plan to conform to [the Working Families Tax Cuts’] provisions.” (Thompson Reuters: State lawmakers’ dilemma – To conform or to decouple with OBBBA? – 11/6/25)The District of Columbia is one of these Democrat-controlled jurisdictions that has passed legislation blocking several Working Families Tax Cuts provisions from benefiting taxpayers:“D.C.'s progressive city council passed a local measure to stop certain parts of Trump's One Big Beautiful Bill Act from going into effect due to their expected effect of cutting city revenues.”“Policies that would have been blocked include Trump's elimination of taxes on tipped and overtime wages, as well as certain tax cuts aimed at businesses.” (Fox News: House GOP moves to block DC from stopping Trump tax cuts for tipped, overtime workers – 2/4/26)DEMOCRAT-CONTROLLED STATES LIKE COLORADO, ILLINOIS, CALIFORNIA, MAINE, AND NEW YORK HAVE ALSO TAKEN STEPS TO UNDERMINE REPUBLICANS’ LANDMARK TAX CUTS“By denying their residents access to these important tax cuts, these governors and legislators are forcing hardworking Americans to shoulder higher state tax burdens, robbing them of the relief they deserve and exacerbating the financial squeeze on low- and middle-income households.” – Secretary of the Treasury Scott Bessent“As Coloradans sit down to figure out their taxes, some are being confronted with a surprise on their state tax forms… Colorado added a line to its state tax form for ‘excess federal deduction for overtime pay.’ Taxpayers must report the amount deducted for overtime from federal Schedule 1-A and add it back on the state 1040 form.” (The Coloradoan: Colorado taxpayers: Your overtime pay is still taxed by the state – 2/6/26)“Illinois has a 4.95% tax on income, and restaurant workers here can expect to pay that on all the tips they make. Illinois hasn’t adopted the federal exemption from tax on overtime and tips at the state level, so tipped workers here can expect that rate on all the tips they make.” (25 News Now Peoria: Peoria business owners frustrated as Illinois does not extend federal ‘No Tax on Tips’ to state income tax – 12/6/25)Illinois Republican “State Rep. Ryan Spain filed similar legislation in March last year to get Illinois to” eliminate taxes on tips, and “state Rep. Anthony DeLuca, a Chicago Heights Democrat, has filed a similar proposal at the turn of the new year.” (WMBD Peoria: Bipartisan bill calls to bring no tax on tips to Illinois – 1/20/26)But Illinois lawmakers say these proposals “haven’t made it to a committee hearing.” (25 News Now Peoria: Peoria business owners frustrated as Illinois does not extend federal ‘No Tax on Tips’ to state income tax – 12/6/25)“California is one of several states, including Illinois and New York, that won’t conform to the federal tax policy — meaning tips will still be taxed under state law… Gov. Gavin Newsom’s office said that changing how tips are taxed would require changes to state law.”“‘It would put a lot more money in my pocket if they didn’t tax [tips],’ said Alex Frost, a longtime bartender at Baja Cantina in Marina del Rey. ‘I don’t really quite understand it. I mean, California already taxes you more than any other state. I don’t see what they need my money.’ Frost said he didn’t vote for Trump, but still supports the ‘No tax on tips’ provision of the One Big Beautiful Bill that allows federal tax deductions for tips and overtime.” (New York Post: California waiters, bartenders seethe over state ignoring ‘No tax on tips’ policy – 12/30/25)“Maine has refused both tip and overtime deductions, in addition to select business deductions” and the increased standard deduction. (Washington Examiner: Bessent slams blue states for declining One Big Beautiful Bill Act tax relief – 12/10/25; CentralMaine.com: op-ed: Conformity with the federal tax code is the relief Maine families deserve – 12/18/25)“When major changes like these are made at the federal level, Maine typically follows suit by passing our own legislation to have Maine’s tax laws conform with the federal Internal Revenue Code.”But “Gov. Janet Mills issued a directive and determination declining to adopt some of those major federal provisions for Maine’s 2025 tax returns that will be filed starting in January. It means tips and overtime will still be subject to Maine’s income tax, and the state will decouple from the increased standard deduction amounts. And according to her, you can also forget about the car loan interest.” (CentralMaine.com: op-ed: Conformity with the federal tax code is the relief Maine families deserve – 12/18/25)Tipped workers in New York won’t be able to take full advantage of the Working Families Tax Cuts’ no tax on tips provision this year because Democrat leaders refused to act in time:In December, the New York Post reported: “Gov. Kathy Hochul and Democratic New York lawmakers haven’t extended President Trump’s ‘no tax on tips’ policy to state income taxes — hitting bartenders and restaurant workers in the pocketbook all while preaching affordability.” (New York Post: Hochul hasn’t served up Trump’s ‘no tax on tips’ policy, ticking off NY restaurant workers – 12/26/25)Finally, last month Gov. Hochul announced she “will put forward a ‘no tax on tips’ proposal in her New York Executive Budget proposal for fiscal 2027,” too late for workers to take advantage of the provision this tax year. (The Hill: Hochul to put forward ‘no tax on tips’ proposal in New York – 1/1/26)New York Democrats also have not announced any plans to implement the Working Families Tax Cuts’ no tax on overtime provision, meaning overtime workers in the state will still pay state taxes on overtime. (New York Post: Gov. Kathy Hochul proposes no NY state tax on tips after major backlash – 1/1/26)THE TAX CUTS THESE DEMOCRAT JURISDICTIONS ARE BLOCKING ARE OVERWHELMINGLY POPULAR AND BENEFIT MILLIONS OF AMERICANSPoll after poll shows Americans overwhelmingly support no tax on tips and overtime:A January 2026 Rainey Center poll found that 69% of voters polled support no tax on tips and overtime provisions in Republicans’ Working Families Tax Cuts.Additionally, the “deduction for American-made car loans receives 65% support.” (Rainey Center Poll – Jan. 2026)According to a 2025 Harvard-Harris poll 66% of registered voters support the Working Families Tax Cuts’ provision to eliminate “taxes on tips and overtime pay for workers earning under $150,000, capped at $25,000 annually until 2028.” (Harvard-Harris Poll – July 2025)By a 50%-34% margin, registered voters support “[m]aking the previous Trump tax cuts permanent,” including the standard deduction, which Republicans increased and made permanent in the Working Families Tax Cuts. (Harvard-Harris Poll – July 2025; U.S. Senate Committee on Finance: Working Families Tax Cuts – accessed 2/10/26)Millions of tipped workers will benefit from no tax on tips, including bartenders, waiters, entertainers and performers, hospitality workers, home electricians and plumbers, tutors, hairstylists, and taxi and rideshare drivers. (U.S. Senate Committee on Finance: Crapo Highlights Tax Wins for Hardworking Americans and Main Street – 6/28/25; Axios: Scoop: List of jobs covered by Trump's "no tax on tips" (See if you qualify) – 9/1/25)Millions of hourly workers will benefit from no tax on “qualified overtime compensation.” (U.S. Senate Committee on Finance: Crapo Highlights Tax Wins for Hardworking Americans and Main Street – 6/28/25; U.S. Internal Revenue Service: Treasury, IRS provide guidance for individuals who received tips or overtime during tax year 2025 – 11/21/25)Over 90% of taxpayers claim the standard deduction. (U.S. Senate Committee on Finance: Working Families Tax Cuts – accessed 2/10/26)PrintEmailTweetPreviousTHE NEWSROOMSENATE RESOURCESABOUT LEADER THUNEFacebookXInstagram
