WeVote
Log In

Bill

SB

Bill

HB 5057

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

2026 Regular Session Introduced by Seth Bronko

Connecticut bill allowing workers to deduct tips from state taxable income, potentially lowering taxes for service industry workers while reducing state revenue.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#federalincometax #gratuities #incometaxdeductions(state)
0
WeVote Research Nonpartisan
Bill Summary · HB 5057

Legislative bill overview

HB 5057 would establish a personal income tax deduction for tips and gratuities received by workers in Connecticut. This means individuals who earn tips could deduct those amounts from their taxable income, potentially reducing their state income tax liability. The bill is currently in the Joint Committee on Finance, Revenue and Bonding.

Why is this important

Tips represent a significant portion of income for service industry workers, yet are often taxed at full rates. This deduction could provide meaningful tax relief to bartenders, servers, hairdressers, delivery drivers, and similar workers who depend on gratuities. However, it also represents foregone state tax revenue that would need to be addressed through other means or budget adjustments.

Potential points of contention

  • Revenue impact: The state would lose tax revenue from tip income; the fiscal note would clarify how much this costs Connecticut's budget
  • Equity concerns: Critics may argue this primarily benefits service industry workers while other low-income workers receive no equivalent deduction, raising fairness questions
  • Administration challenges: Determining what qualifies as a "tip" versus regular wages, and how workers would document tip income for deduction purposes, could create compliance complexity
  • Federal tax alignment: Federal law generally requires tips to be taxed as income; this state deduction would create a divergence that complicates tax filing

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

Sign in to ask a question.