Exempting qualified tips from the individual income tax, and including applicability provisions

Sponsored by the House Ways and Means Committee, Rep. Ryan Weldon (R), Rep. David E. Young (R)

Topics:Taxes Income taxes

Same legislation: HF 268

Write your legislators about it

Official bill page Lobbyist declarations One-pager to print

Where it is now

Done: IntroducedFebruary 6, 2025
Done: SubcommitteeFebruary 20, 2025
Done: House committeeApril 16, 2025
Stopped: Passes the HouseDied when the General Assembly ended
Next: Senate committeeFunnel: by March 20, 2026
Next: Passes the Senate
Next: To the Governor
Next: Signed into law

Died when the session ended The General Assembly adjourned on October 2, 2026. Bills that didn’t pass both chambers died. What’s a funnel?

What’s in it

This bill excludes certain qualified tips from the calculation of net income for purposes of the individual income tax. An individual whose net income is less than $155,000, without regard to any deduction of qualified tips the individual received, is eligible to exclude up to $25,000 of such tips from the calculations of net income. The bill defines “qualified tips” to mean any cash tip received by an individual in the course of such individual’s employment in an occupation that customarily received cash tips prior to December 31, 2023.

Read the full explanation

The department of revenue is required to adopt rules to administer the bill. The bill applies in tax years beginning on or after January 1, 2026, in the tax years where the federal government has not enacted similar legislation allowing for the deduction of qualified tips for purposes of the federal income tax.

From the explanation printed with the bill as introduced, written by the Legislative Services Agency. Amendments adopted later aren’t reflected. Full bill text

1 written public comment to its subcommittee: February 25, 2025 (1) · on the Legislature’s site

Fiscal note

Less revenue: up to $14.1M Compare with other bills

The deduction in HF 1030 will decrease revenue to the General Fund by the following amounts: • FY 2026 = $5.6 million • FY 2027 = $12.9 million • FY 2028 = $13.2 million • FY 2029 = $13.5 million • FY 2030 = $13.8 million • FY 2031 = $14.1 million The decrease in tax liability is also projected to decrease the statewide local option income surtax for schools by the following amounts: • FY 2026 = $0 • FY 2027 = $319,000 • FY 2028 = $327,000 • FY 2029 = $334,000 • FY 2030 = $342,000 • FY 2031 = $350,000

Exemption from Income Tax, Tips · April 22, 2025 · $14.1M

Nonpartisan cost estimates from the Legislative Services Agency’s Fiscal Services Division. The newest is first. Reading a fiscal note

Iowa Code it changes

Amends§422.7

Read from the bill as introduced. Each links to every bill touching that chapter of the Iowa Code. How the Code works

Lobbying

5 for · 0 against · 8 undecided · Who →

Family tree

Where this legislation came from and where it went: earlier tries, the versions it moved through this Assembly, and later bills built on it.

91st General Assembly

HF 268Renumbered HF 1030Cleared committeefrom HF 268

Earlier and later bills are matched by wording or an identical title; check the text to be sure it’s the same idea.

Similar bills

HF 293 Exempting cash tips from the individual income tax, and including applicability provisions
91st General Assembly · In committee
Nearly identical
HF 361 Exempting cash tips from the individual income tax, and including applicability provisions
91st General Assembly · In committee
Nearly identical

Matched by the wording of each bill’s explanation, or an identical title. Companion bills and renumbered versions of this bill aren’t listed; they’re the same bill.