State Rep. Anthony DeLuca, D-Chicago Heights, has introduced a measure in the Illinois House that would create a state income tax deduction for gratuities. He said it would enable working people to keep more of their earnings.

Through 2025 legislation Congress provided a temporary federal income tax deduction for qualified tips for tax years 2025 through 2028, though there are some restrictions.

DeLuca’s House Bill 4329 would create a state income tax deduction for gratuities that are included in the taxpayer’s federal adjusted gross income. Illinois currently has not moved to match the federal exemption on taxes on tips “leaving workers still on the hook for state taxes,” he said. 

“This stark discrepancy is becoming clearer for residents as they enter tax filing season. In a time of rising costs, this (Illinois) measure would make a real difference in helping working families address affordability, skyrocketing property taxes and more,” DeLuca said.

“This is a bipartisan idea that resonates with people across our state. Let’s put working people first and fully eliminate taxes on tips.”

For more information, contact DeLuca by email at [email protected].