Bill > HB567

This bill creates a new tax deduction for tipped employees in Hawaii, allowing them to deduct the total amount of tips they receive during a taxable year from their gross income. Specifically, the deduction applies to tips that are reported to the employer for Federal Insurance Contribution Act (FICA) purposes and requires the employee to receive more than $30 per month in gratuities to qualify. The bill defines "tips" as voluntary monetary contributions received from guests, patrons, or customers that are reported to the employer. The director of taxation will be responsible for creating the necessary forms for claiming this deduction and may require proof of the claimed tips. This tax deduction will become effective for taxable years beginning after December 31, 2025, meaning it will first apply to the 2026 tax year. The provision aims to provide financial relief for workers in service industries who rely on tips as a significant part of their income.

Labor and Employment

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HB&billnumber=567&year=2026