Both the House and Senate versions are structured as deductions, not full exclusions of tips from taxable income. So, workers would still report their tips and claim the deduction when filing their taxes, rather than having tips automatically excluded from taxable income.

Under the bill, employees would be eligible for an annual income tax deduction of $25,000 for some types of cash tips.

Eliminating taxes on tips has emerged as a sturdy — and contentious — political talking point in the last year, and now it's a step closer to reality. On Tuesday, the Senate unanimously voted to pass the No Tax on Tips Act,