Hawaii HB575 amends tax law to allow a deduction for tips received by employees.

Hawaii HB575 introduces a new tax deduction for tipped employees, allowing them to deduct the amount of tips they receive during the taxable year. This deduction applies to tips reported to employers for Federal Insurance Contribution Act purposes. The bill specifies that the director of taxation may require proof of the claim for the tax deduction and adopt necessary rules. The changes will apply to taxable years beginning after December 31, 2025.

Hawaii HB575 amends tax law to allow a deduction for tips received by employees.

Hawaii HB575 introduces a new tax deduction for tipped employees, allowing them to deduct the amount of tips they receive during the taxable year. This deduction applies to tips reported to employers for Federal Insurance Contribution Act purposes. The bill specifies that the director of taxation may require proof of the claim for the tax deduction and adopt necessary rules. The changes will apply to taxable years beginning after December 31, 2025.