This bill proposes a gross income tax deduction for income earned in the form of tips, allowing taxpayers to deduct the amount of tip income received for services rendered during the taxable year. To qualify for this deduction, taxpayers must report their tip income in accordance with federal income tax law, specifically referencing the requirements outlined in subsection (a) of section 6053 of the federal Internal Revenue Code. The bill also empowers the Director of the Division of Taxation to establish necessary rules and regulations to implement this provision.

The act is set to take effect immediately and will apply to taxable years beginning on or after January 1 of the year following its enactment. This legislative change aims to provide financial relief to individuals who rely on tips as a significant portion of their income, ensuring that their earnings are fairly accounted for in the state's gross income tax calculations.