AN ACT ESTABLISHING A TEMPORARY PERSONAL INCOME TAX DEDUCTION FOR TIPS OR GRATUITIES.

Plain English Breakdown

The official source does not provide details on how the deduction phases out based on income thresholds, but it mentions that there are phase-outs for adjusted gross incomes over specified amounts.

Act Creating a Temporary Tax Break for Tips

This act creates a temporary personal income tax deduction of up to $25,000 for tips or gratuities reported by taxpayers from January 1, 2026, through December 31, 2028.

What This Bill Does

• Creates a new personal income tax deduction for tips and gratuities.
• Limits the deduction amount to $25,000 per taxpayer.
• Applies this deduction only during the years from January 1, 2026, through December 31, 2028.

Who It Names or Affects

• Taxpayers who receive tips and report them on their tax returns.

Terms To Know

Personal Income Tax Deduction

An amount that can be subtracted from a person's income before calculating how much they owe in taxes.

Limits and Unknowns

• Does not specify what happens after December 31, 2028.
• Only applies to tips reported on tax returns during the specified period.

Official Summary Text

To establish a temporary personal income tax deduction of up to twenty-five thousand dollars for the amount of tips or gratuities declared by certain taxpayers for the taxable years commencing on or after January 1, 2026, and prior to January 1, 2029.

Current Bill Text

LCO No. 128 1 of 1

General Assembly Proposed Bill No. 66
February Session, 2026 LCO No. 128

Referred to Committee on FINANCE, REVENUE AND
BONDING

Introduced by:
SEN. GORDON, 35th Dist.

AN ACT ESTABLISHING A TEMPORARY PERSONAL INCOME TAX
DEDUCTION FOR TIPS OR GRATUITIES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

That title 12 of the general statutes be amended to (1) establish a 1
personal income tax deduction of up to twenty-five thousand dollars for 2
the amount of tips or gratuities declared by a taxpayer for the taxable 3
years commencing on or after January 1, 2026, and prior to January 1, 4
2029, and (2) provide for income threshold phase-outs of the deduction 5
for adjusted gross income over one hundred fifty thousand dollars for 6
single filers and three hundred thousand dollars for married individuals 7
filing jointly. 8
Statement of Purpose:
To establish a temporary personal income tax deduction of up to
twenty-five thousand dollars for the amount of tips or gratuities
declared by certain taxpayers for the taxable years commencing on or
after January 1, 2026, and prior to January 1, 2029.