House Bill No. by Representative Bayham proposes to enact a new income tax deduction for resident individual taxpayers in Louisiana, specifically for amounts of tip income received during a taxable year. The bill introduces new legal language under R.S. 47:293(9)(a)(xxvii) and R.S. 47:297.26, defining "tip income" to include amounts reported as "social security tips" and "allocated tips" on IRS Form W-2, as well as cash and charge tips received, minus those reported to employers on IRS Form 4137. The deduction is capped at $25,000 per taxpayer for any taxable year.

The provisions of this bill will apply to taxable periods beginning on or after January 1, 2026, and the effective date for the law is also set for January 1, 2026. This legislation aims to provide financial relief to individuals who rely on tip income, thereby encouraging transparency and proper reporting of such earnings.