Exempts qualified tips from individual income tax for taxpayers with net income under $155,000.

The bill exempts qualified tips from the individual income tax for taxpayers with net income under $155,000. Qualified tips are defined as any cash tip received by an individual in an occupation that traditionally and customarily received cash tips before December 31, 2023. The Department of Revenue is required to adopt rules to administer this exemption. The bill applies to tax years beginning on or after January 1, 2026, unless the federal government enacts legislation allowing for the deduction of qualified tips for federal individual income tax purposes.

Exempts qualified tips from individual income tax for taxpayers with net income under $155,000.

The bill exempts qualified tips from the individual income tax for taxpayers with net income under $155,000. Qualified tips are defined as any cash tip received by an individual in an occupation that traditionally and customarily received cash tips before December 31, 2023. The Department of Revenue is required to adopt rules to administer this exemption. The bill applies to tax years beginning on or after January 1, 2026, unless the federal government enacts legislation allowing for the deduction of qualified tips for federal individual income tax purposes.