Bill > AB1550

This bill, effective immediately as a tax levy, aims to conform California's personal income tax law to certain federal provisions for taxable years beginning on or after January 1, 2026, and before January 1, 2029, by allowing taxpayers to deduct qualified tips and qualified overtime compensation from their taxable income. This means that for this specific period, individuals can reduce the amount of income they are taxed on by the amount of certain tips and overtime pay they receive, in addition to being able to take the standard deduction, which is a fixed amount taxpayers can subtract from their income instead of itemizing specific deductions. The bill also includes provisions for reporting on the effectiveness of these deductions, with the goal of helping workers retain more of their earnings, and specifies that social security number requirements related to these deductions under federal law will not apply in California.

Budget and Finance

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB1550