This bill introduces a tax deduction for individual and corporate income taxes for income derived from indigent representation by eligible law firms. It defines an "eligible law firm" as one with two or more attorneys practicing for at least half of each tax year while engaged in an eligible case. An "eligible case" refers to appointments made on or after July 1, 2025, for attorneys who have been licensed for fewer than ten years. The deduction amount is calculated based on the difference between the total hours billed by the eligible attorney multiplied by either $150 or the actual hourly rate charged by the law firm, whichever is lower, and the total hours billed multiplied by the hourly rate in effect for the case.

Additionally, the bill specifies that individual taxpayers who are partners in a partnership, shareholders in a subchapter S corporation, or members of a limited liability company can deduct their pro rata share of the deduction based on the profits or losses from these entities. The bill also includes a retroactive applicability provision, making it effective for tax years beginning on or after January 1, 2025.

Statutes affected:
Introduced: 422.7, 814.11