Bill > HB1898

This bill amends the Illinois Income Tax Act to create a new income tax deduction for gratuities (tips) that are included in a taxpayer's federal adjusted gross income. Specifically, for taxable years beginning on or after January 1, 2026, the bill allows taxpayers to subtract the amount of gratuities from their base income when calculating their state income tax. The bill defines "gratuities" by referencing the definition in the Minimum Wage Law, which typically means voluntary monetary contributions given to service workers in addition to the base price of a service. By creating this deduction, the bill aims to provide tax relief for workers who rely on tips as a significant part of their income, such as restaurant servers, bartenders, taxi drivers, and other service industry professionals. The deduction would effectively reduce the taxable income for workers who receive tips, potentially lowering their overall state tax burden.

https://www.ilga.gov/legislation/BillStatus.asp?DocNum=1898&GAID=18&DocTypeID=HB&SessionID=114&GA=104