The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions from gross income in calculating adjusted gross income.
This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2036, would allow a deduction in determining adjusted gross income for an amount equal to the qualified tips, as defined, received by a qualified taxpayer, as defined, during the taxable year, not to exceed $20,000.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill also would include additional information required for any bill authorizing a new tax expenditure.
This bill would take effect immediately as a tax levy.

Statutes affected:
SB17: 17215.1 RTC, 17551 RTC, 18631 RTC, 18663 RTC, 19183 RTC, 927 UIC, 940 UIC, 987.7 UIC, 13009 UIC, 13009.5 UIC, 13027 UIC, 13055 UIC
12/02/24 - Introduced: 17215.1 RTC, 17551 RTC, 18631 RTC, 18663 RTC, 19183 RTC, 927 UIC, 940 UIC, 987.7 UIC, 13009 UIC, 13009.5 UIC, 13027 UIC, 13055 UIC
04/28/25 - Amended Senate: 17072 RTC, 17072 RTC
05/05/25 - Amended Senate: 17072 RTC