1. (a) This section applies to the taxable year beginning after December 31, 2025, and ending before January 1, 2027.
2. (b) A taxpayer is entitled to a deduction from the taxpayer's adjusted gross income in an amount equal to the amount associated with qualified tips that is deducted from a taxpayer's federal adjusted gross income under Section 224 of the Internal Revenue Code.

3. (c) If a taxpayer has both qualified tips that are included in the taxpayer's adjusted gross income and qualified tips that are not included in the taxpayer's adjusted gross income, the deduction for purposes of this article and IC 6-3.6 shall be equal to the qualified tips deducted from the taxpayer's federal adjusted gross income under Section 224 of the Internal Revenue Code multiplied by the quotient of:

   1. (1) the qualified tips included in the taxpayer's adjusted gross income after the application of any other exemption, deduction, or exclusion of qualified tips from the taxpayer's adjusted gross income under this article or IC 6-3.6 ; divided by

   2. (2) the qualified tips included in the taxpayer's federal adjusted gross income.

      This subsection shall be applied separately to this article and IC 6-3.6 to the extent that the taxpayer's adjusted gross income is determined separately for each article.

As added by P.L.128-2026, SEC.11.