Virginia Governor proposes exempting service tips from state income tax, benefiting over 250,000 workers.

Virginia Governor Glenn Youngkin has proposed a budget that would exempt service tips from state income tax, potentially returning $70 million annually to over 250,000 workers in food service, personal service, and hospitality. The proposal, which needs approval from the General Assembly, would allow workers to claim a tax deduction for tips, as long as the income is reported on their federal return. Economists warn some employers might shift more compensation to tips, exploiting the policy.

December 16, 2024
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