SB-984 • 2026

Personal Income Tax Law: deductions: tips.

Labor 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
Last action: 2026-05-14
Official status: May 14 hearing: Held in committee and under submission.
Effective date: Not listed

Plain English Breakdown

The official source material does not provide specific details on performance indicators or data collection requirements for the bill's effectiveness.

Personal Income Tax Deductions for Tips

This law allows people who earn tips to deduct those amounts from their income taxes, making it easier for them to calculate how much tax they owe.

What This Bill Does

Allows workers who get tips as part of their job to subtract the amount of those tips when figuring out their taxable income.
Makes this change effective starting in January 2026 and ending before January 1, 2029.

Who It Names or Affects

People who earn tips as part of their job, such as waiters or bartenders.

Terms To Know

Taxable income: The amount of money you make that the government says is subject to taxes after deductions are taken out.
Qualified tips: Tips that meet certain requirements and can be deducted from your taxable income.

Limits and Unknowns

The bill does not specify what happens after January 1, 2029.
It is unclear if there will be further changes to the tax law beyond this period.

Bill History

2026-05-14 California Legislative Information
May 14 hearing: Held in committee and under submission.
2026-05-12 California Legislative Information
Set for hearing May 14.
2026-05-11 California Legislative Information
May 11 hearing: Placed on APPR. suspense file.
2026-05-07 California Legislative Information
Set for hearing May 11.
2026-05-06 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0.) (May 6). Re-referred to Com. on APPR.
2026-04-29 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX.
2026-04-09 California Legislative Information
Set for hearing May 6.
2026-02-18 California Legislative Information
Referred to Com. on REV. & TAX.
2026-02-09 California Legislative Information
From printer. May be acted upon on or after March 8.
2026-02-05 California Legislative Information
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 984, as amended, Ochoa Bogh.
Personal Income Tax Law: deductions: tips.
The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions in calculating taxable income. Existing federal income tax law, for taxable years beginning before January 1, 2029, allows deductions in determining taxable income, as defined, for amounts equal to the qualified tips, as defined.
This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2029, would conform to federal income tax law with regard to qualified
tips.
tips, except as provided.
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