SB 1255
An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for classes of income and providing for exclusion of tips from taxable income.
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Sign in to take action- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Bill overview
This bill amends Pennsylvania’s tax code to exclude tips received by employees from their taxable income. Specifically, it adds a provision stating that tips, gratuities, and voluntary payments received in the course of employment are not included when calculating taxable income. The Department of Revenue is tasked with creating regulations to prevent fraudulent reporting of wages as tips.
Key provisions
- Tips received by employees will not be included in their taxable income.
- The bill defines ‘tip’ as a voluntary payment from a customer.
- The bill clarifies that employer-mandated fees or service charges are not considered tips.
- The Department of Revenue will create regulations to prevent fraud related to tip reporting.
Who is affected
- Employees
- Employers
- Taxpayers
- The Department of Revenue
Notable changes
- Previously, tips were included in an employee's taxable income.
- This bill creates a specific exclusion for tips, gratuities, and voluntary payments.
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