Read the full stored bill text
House
File
1030
-
Introduced
HOUSE
FILE
1030
BY
COMMITTEE
ON
WAYS
AND
MEANS
(SUCCESSOR
TO
HF
268)
A
BILL
FOR
An
Act
exempting
qualified
tips
from
the
individual
income
tax,
1
and
including
applicability
provisions.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
TLSB
2526HV
(2)
91
jm/jh
H.F.
1030
Section
1.
Section
422.7,
Code
2025,
is
amended
by
adding
1
the
following
new
subsection:
2
NEW
SUBSECTION
.
45.
a.
For
a
taxpayer
whose
net
income
is
3
less
than
one
hundred
fifty-five
thousand
dollars,
subtract,
4
to
the
extent
included,
the
amount
of
qualified
tips
that
5
were
received
and
are
included
on
statements
furnished
to
an
6
employer
as
required
by
section
6053(a)
of
the
Internal
Revenue
7
Code,
not
to
exceed
twenty-five
thousand
dollars.
8
b.
As
used
in
this
subsection:
9
(1)
“Net
income”
means
net
income
as
properly
computed
10
under
this
section
without
regard
to
the
deduction
in
this
11
subsection.
12
(2)
“Qualified
tips”
means
any
cash
tip
received
by
an
13
individual
in
the
course
of
such
individual’s
employment
in
an
14
occupation
that
traditionally
and
customarily
received
cash
15
tips
before
December
31,
2023.
16
c.
The
department
shall
adopt
rules
pursuant
to
chapter
17A
17
to
administer
this
subsection.
18
Sec.
2.
CONTINGENT
APPLICABILITY.
This
Act
applies
to
tax
19
years
beginning
on
or
after
January
1,
2026,
unless
the
federal
20
government
enacts
legislation
allowing
for
the
deduction
of
21
qualified
tips
for
federal
individual
income
tax
purposes,
22
and
in
such
a
case
this
Act
does
not
apply
in
the
same
tax
23
year
where
federal
legislation
allowing
for
the
deduction
of
24
qualified
tips
for
federal
individual
income
tax
purposes
25
applies.
26
EXPLANATION
27
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
28
the
explanation’s
substance
by
the
members
of
the
general
assembly.
29
This
bill
excludes
certain
qualified
tips
from
the
30
calculation
of
net
income
for
purposes
of
the
individual
31
income
tax.
An
individual
whose
net
income
is
less
than
32
$155,000,
without
regard
to
any
deduction
of
qualified
tips
the
33
individual
received,
is
eligible
to
exclude
up
to
$25,000
of
34
such
tips
from
the
calculations
of
net
income.
35
-1-
LSB
2526HV
(2)
91
jm/jh
1/
2
H.F.
1030
The
bill
defines
“qualified
tips”
to
mean
any
cash
tip
1
received
by
an
individual
in
the
course
of
such
individual’s
2
employment
in
an
occupation
that
customarily
received
cash
tips
3
prior
to
December
31,
2023.
4
The
department
of
revenue
is
required
to
adopt
rules
to
5
administer
the
bill.
6
The
bill
applies
in
tax
years
beginning
on
or
after
January
7
1,
2026,
in
the
tax
years
where
the
federal
government
has
8
not
enacted
similar
legislation
allowing
for
the
deduction
of
9
qualified
tips
for
purposes
of
the
federal
income
tax.
10
-2-
LSB
2526HV
(2)
91
jm/jh
2/
2