Bill
Bill > HF361
IA HF361
IA HF361A bill for an act exempting cash tips from the individual income tax, and including applicability provisions.
summary
Introduced
02/12/2025
02/12/2025
In Committee
02/12/2025
02/12/2025
Crossed Over
Passed
Dead
Introduced Session
91st General Assembly
Bill Summary
This bill excludes from the individual income tax the amount of cash tips received and included on statements furnished to an employer as required by section 6053(a) of the Internal Revenue Code. The bill applies to tax years beginning on or after January 1, 2026.
AI Summary
This bill proposes to exempt cash tips from individual income tax in Iowa by amending the state tax code. Specifically, the bill allows taxpayers to subtract the amount of cash tips from their taxable income, provided those tips are documented on statements furnished to their employer as required by section 6053(a) of the Internal Revenue Code. This means that service industry workers who receive cash tips, such as waitstaff, bartenders, and other service workers, would not have to pay state income tax on those earnings. The bill will take effect for tax years beginning on or after January 1, 2026, giving taxpayers and the state's tax authorities time to prepare for the change. By excluding cash tips from taxable income, the bill aims to provide financial relief to workers in industries where tips are a significant part of their compensation.
Committee Categories
Budget and Finance
Sponsors (1)
Last Action
Introduced, referred to Ways and Means. H.J. 305. (on 02/12/2025)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=HF361 |
| BillText | https://www.legis.iowa.gov/docs/publications/LGI/91/attachments/HF361.html |
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