HI HB575

Adds a new tax deduction to Chapter 235, Hawaii Revised Statutes allowing tipped employees to deduct tips from gross income that are reported to employers under Federal Insurance Contribution Act requirements.

Defines "tipped employee" as an employee working in an occupation where they receive more than $30 per month in gratuities.

Defines "tips" as gratuities or voluntary monetary contributions received by an employee from guests, patrons, or customers that are reported to the employer for Federal Insurance Contribution Act purposes.

Requires the director of taxation to prepare forms, require proof of tips claimed, and adopt rules under Chapter 91 to administer the deduction.

Effective for taxable years beginning after December 31, 2025.