Bill > SB694

This bill proposes to create a new subtraction for individual income taxes in Virginia, specifically for income derived from tips. For taxable years beginning on or after January 1, 2026, but before January 1, 2027, taxpayers will be able to subtract 25 percent of the federal tip income deduction. For taxable years beginning on or after January 1, 2027, and thereafter, this subtraction will increase to 50 percent of the federal tip income deduction. This change aims to provide tax relief to individuals who receive a significant portion of their income through tips, which are often subject to federal income tax.