SB984 allows California taxpayers to deduct tips from their income tax for three years, starting in 2026.

SB984 modifies the Internal Revenue Code to allow California taxpayers to deduct tips from their income tax for taxable years beginning on or after January 1, 2026, and before January 1, 2029. The Franchise Tax Board will replace the term "secretary" in the relevant section. The bill also exempts taxpayers from needing to provide a social security number for this deduction. The Franchise Tax Board must report to the Legislature on the number of taxpayers deducting tips and the average amount deducted. The bill will be repealed on December 1, 2029.

SB984 allows California taxpayers to deduct tips from their income tax for three years, starting in 2026.

SB984 modifies the Internal Revenue Code to allow California taxpayers to deduct tips from their income tax for taxable years beginning on or after January 1, 2026, and before January 1, 2029. The Franchise Tax Board will replace the term "secretary" in the relevant section. The bill also exempts taxpayers from needing to provide a social security number for this deduction. The Franchise Tax Board must report to the Legislature on the number of taxpayers deducting tips and the average amount deducted. The bill will be repealed on December 1, 2029.