Bill > HB2735

This bill amends the Illinois Income Tax Act to create a new income tax deduction for gratuities 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 term "gratuities" is defined according to Section 3 of the Minimum Wage Law, which typically refers to tips or voluntary payments made to service workers. This deduction means that tips will not be counted as taxable income for Illinois state tax purposes, potentially providing financial relief for workers in industries where tips are a significant part of their earnings, such as restaurants, bars, and other service-related jobs.

https://www.ilga.gov/legislation/BillStatus.asp?DocNum=2735&GAID=18&DocTypeID=HB&SessionID=114&GA=104