Bill
HB 386
The bill would change how Delaware taxes qualified tip income by altering the deductions or credits available to tip-earning workers.
HB 386 (Session 153, Delaware) — Summary
Overview
- Bill purpose: Amend Title 30 of the Delaware Code to modify personal income tax deductions or credits related to qualified tip income.
- Status: Introduced and assigned to the Revenue & Finance Committee in the House on April 30, 2026.
- Sponsors: A group of nine co-sponsors including Frank Cooke, Tim Dukes, Bryan Shupe, Stell Selby, Bryant Richardson, Lyndon Yearick, Brian Pettyjohn, Danny Short, and Jeff Hilovsky.
Key provisions (as described in the bill title and typical tax-deduction/credit reforms)
- Scope: The act targets the personal income tax treatment of qualified tip income earned by workers. It proposes changes to the deductions or credits that can be claimed against personal income tax for such income.
- Mechanism: The bill may modify eligibility criteria, the amount of the deduction or credit, the calculation method, and/or the interaction with other tax provisions. This could include:
- Replacing, increasing, or eliminating existing deductions/credits tied to qualified tip income
- Introducing new limits or phase-ins/phase-outs based on income, filing status, or other criteria
- Adjusting how tip income is reported for tax purposes (e.g., combined with wages, or treated separately)
- Target taxpayers: Individuals who receive qualified tip income (e.g., service industry workers such as waitstaff, bartenders, hotel staff) and who file Delaware personal income tax returns.
- Net effect: The bill aims to alter the tax relief (deduction or credit) available to tip-earning workers, potentially increasing or decreasing tax liability depending on the specific changes enacted.
Potential impact and considerations
- For tip-income earners: Depending on the final form, workers could see more favorable tax treatment (larger deduction/credit) or a reduced benefit if the policy narrows eligibility or reduces the value of the credit.
- For employers and payroll: Changes to tip-related tax provisions could influence payroll withholding, reporting requirements, and how tip income is reconciled for state tax purposes.
- Revenue implications: Modifications to deductions or credits affect state tax revenue; the committee and sponsors may weigh anticipated fiscal impact when drafting the final language.
- Administrative considerations: Any changes may require updates to tax forms, instructions, and internal Delaware Department of Revenue guidance.
Timeline and process
- Next steps: As this bill proceeds, it will typically move through the House Revenue & Finance Committee for hearings, potential amendments, and a full House vote before moving to the Senate if advanced. Public hearings and fiscal notes may accompany its consideration.
Notes
- Specific numerical details (e.g., exact deduction/credit amounts, phase-outs, eligibility thresholds) are not provided in the available summary. The bill’s text will specify the precise changes to Title 30 and the statutory language governing qualified tip income deductions or credits.
If you’d like, I can tailor this into a one-page briefing with hypothetical examples (based on likely structures such as a percentage-based credit or a capped deduction) once the bill text is available.
Compiled from official sources — confirm details with the bill’s official record.
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