AB 1443: Personal income taxes: unemployment insurance: tips.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

The Personal Income Tax Law, in modified conformity with federal law, provides various exclusions from gross income in computing tax liability. Existing law requires employers to make specified payments and withholdings from wages paid for employment to, and to file reports of wages and make contributions for unemployment insurance and the employment training tax with, the Employment Development Department. The department is charged with administering the state’s payroll taxes.

This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2031, would exclude tips, as defined, from gross income for the purposes of the Personal Income Tax Law. The bill, on and after January 1, 2026, and until January 1, 2031, would also exclude tips from the definition of wages paid for employment for purposes of income tax withholding and for purposes of unemployment insurance and the employment training tax. This bill would also make related changes to other provisions.

Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill would include additional information required for any bill authorizing a new tax expenditure.

Sponsors

Sponsors by party (alphabetical): Republican 1

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. June 5, 2025From committee: Without further action pursuant to Joint Rule 62(a).
2. April 28, 2025In committee: Set, final hearing. Held under submission.
3. April 21, 2025In committee: Set, second hearing. Referred to suspense file.
4. April 7, 2025In committee: Set, first hearing. Hearing canceled at the request of author.
5. March 17, 2025Referred to Com. on REV. & TAX.
6. February 24, 2025Read first time.
7. February 22, 2025From printer. May be heard in committee March 24.
8. February 21, 2025Introduced. To print.