Bill > HB195

This bill creates a new tax deduction for tip income for Louisiana resident taxpayers, allowing individuals to deduct tips from their tax table income with specific guidelines and limitations. The deduction covers three types of tip income: social security tips reported on IRS Form W-2, allocated tips reported on IRS Form W-2, and additional cash and charge tips reported on IRS Form 4137. Taxpayers can claim this deduction up to a maximum of $25,000 per taxable year, and the provision will take effect for tax periods beginning on or after January 1, 2026. The bill aims to provide financial relief for workers in tip-based industries by reducing their state income tax burden, specifically targeting service industry employees like restaurant workers, bartenders, and other professionals who rely on tips as a significant part of their income. By allowing this deduction, the legislation recognizes the unique income structure of these workers and provides them with a tangible tax benefit.