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HB 5975

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

2025 Regular Session Introduced by Seth Bronko and 3 co-sponsors

Connecticut bill would allow workers to deduct tips and gratuities from state taxable income, reducing tax liability for service industry employees but creating revenue impact questions.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#gratuities #incometaxdeductions(state)
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Bill Summary · HB 5975

Legislative bill overview

HB 5975 would create a personal income tax deduction for tips and gratuities received by workers in Connecticut. This means individuals who earn tips would be able to subtract those tip amounts from their taxable income, potentially reducing their overall state tax liability. The bill is currently in the Joint Committee on Finance, Revenue and Bonding for review.

Why is this important

Tipped workers often earn lower base wages and rely heavily on gratuities for their livelihood, making this deduction potentially significant for service industry employees. The policy could affect tax revenue collection and may incentivize tipped employment, while also raising questions about fairness in the tax code across different occupations. Implementation would require clear IRS coordination since tips are already federally taxable income.

Potential points of contention

  • Tax revenue impact: Deducting tips reduces state tax revenue, requiring either budget adjustments elsewhere or clarification on how this loss will be offset
  • Equity concerns: Other workers (retail, skilled trades, etc.) don't receive tips as core compensation, raising questions about whether creating a tip-specific deduction treats workers unequally
  • Administrative complexity: Verification of tip income for tax purposes is challenging; the bill would need clear rules on documentation and IRS coordination to prevent fraud or disputes

Compiled from official sources — confirm details with the bill’s official record.

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