SB-17 • 2026

Personal income taxes: deductions: tips.

Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Ochoa Bogh (S) , Grove (S) , Valladares
Last action: 2026-02-02
Official status: Returned to Secretary of Senate pursuant to Joint Rule 56.
Effective date: Not listed

Plain English Breakdown

The official source does not specify the exact number of people who will benefit from the deduction or how much money the state will save or lose.

Allowing Deductions for Tips on Taxes

The bill allows people who earn tips to deduct up to $20,000 of those tips from their taxes starting in 2026.

What This Bill Does

Allows taxpayers who receive qualified tips as part of their job income to subtract the amount they receive in tips from their taxable income when calculating adjusted gross income.
Limits this deduction to $20,000 per year for each person who qualifies.

Who It Names or Affects

People who earn tips as part of their job income.

Terms To Know

Qualified taxpayer: A person who meets the requirements set by the bill to receive a tax deduction for tips.
Qualified tips: Tips that meet certain conditions and can be deducted from taxable income according to the bill.

Limits and Unknowns

The exact number of people who will benefit from this deduction is not known.
It's unclear how much money the state will save or lose because of this change.

Bill History

2026-02-02 California Legislative Information
Returned to Secretary of Senate pursuant to Joint Rule 56.
2025-05-23 California Legislative Information
May 23 hearing: Held in committee and under submission.
2025-05-16 California Legislative Information
Set for hearing May 23.
2025-05-12 California Legislative Information
May 12 hearing: Placed on APPR. suspense file.
2025-05-05 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on APPR.
2025-05-02 California Legislative Information
Set for hearing May 12.
2025-04-29 California Legislative Information
Re-referred to Com. on APPR.
2025-04-29 California Legislative Information
Withdrawn from committee.
2025-04-28 California Legislative Information
Read second time and amended. Re-referred to Com. on L., P.E. & R.
2025-04-24 California Legislative Information
From committee: Do pass as amended and re-refer to Com. on L., P.E. & R. (Ayes 5. Noes 0. Page 872.) (April 23).
2025-04-11 California Legislative Information
Set for hearing April 30 in L., P.E. & R. pending receipt.
2025-04-04 California Legislative Information
Set for hearing April 23.
2025-01-29 California Legislative Information
Referred to Coms. on REV. & TAX. and L., P.E. & R.
2024-12-03 California Legislative Information
From printer. May be acted upon on or after January 2.
2024-12-02 California Legislative Information
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 17, as amended, Ochoa Bogh.
Personal income taxes: deductions: tips.
The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions from gross income in calculating adjusted gross income.
This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2036, would allow a deduction in determining adjusted gross income for an amount equal to the qualified tips, as defined, received by a qualified taxpayer, as defined, during the taxable year, not to exceed $20,000.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill also
would include additional information required for any bill authorizing a new tax expenditure.
This bill would take effect immediately as a tax levy.

Current Bill Text

Read the full stored bill text

Download Bill PDF