Bill > SB17

This bill amends California tax law to create a new tax deduction for tips received by certain workers between 2026 and 2036. Specifically, the bill allows workers who regularly receive more than $20 per month in tips to deduct up to $20,000 in tips from their annual income, with some important eligibility restrictions. To qualify, workers cannot hold most professional licenses (with an exception for barbers and cosmetologists), must have adjusted gross income below $250,000 for joint filers or heads of households ($125,000 for other individuals), and must work in an occupation where tips are common. The tips must be voluntarily given by customers and properly reported to tax authorities. The bill requires the Franchise Tax Board to track and report on the deduction's usage, with the stated goal of helping workers retain more of their earnings. The tax deduction is designed as a temporary measure, set to expire on December 1, 2036, and is intended to provide financial relief to workers in tip-based industries by allowing them to reduce their taxable income. The bill takes effect immediately as a tax levy and applies to tax years beginning on or after January 1, 2026.

Budget and Finance, Labor and Employment

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB17