HF 268 (LSB 2526YH (2) 91)

HOUSE FILE 268

BY  YOUNG and WELDON

A BILL FOR

An Act exempting cash tips from the individual income tax, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.7, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  45.  Subtract, to the extent included, the amount of cash tips that were received and are included on statements furnished to an employer as required by section 6053(a) of the Internal Revenue Code.
    Sec. 2.  APPLICABILITY.  This Act applies to tax years beginning on or after January 1, 2026.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill excludes from the individual income tax the amount of cash tips received and included on statements furnished to an employer as required by section 6053(a) of the Internal Revenue Code.
   The bill applies to tax years beginning on or after January 1, 2026.