Federal "no-tax-on-tips" policies don't automatically apply to state income taxes. A bill in the California Legislature aims to change that by aligning state tax codes with federal policy.
The author is San Bernardino Republican Senator Rosilicie Ochoa Bogh.
"Now that the federal government has adopted this policy, we have the opportunity to do the same," she says. "Conformity will provide even more relief to the millions of people who support our state's world class service and hospitality industries."
The bill would allow an itemized deduction up to $25,000 for qualified tips in taxable years 2026 through 2028.
The measure has passed the Senate Revenue and Taxation Committee. It heads next to Appropriations.
