Of the 41 states that levy a broad individual income tax on wages, 19 conformed their tax codes to adopt the No Tax on Tips deduction created by the One Big Beautiful Bill Act (OBBBA) enacted on July 4, 2025. Twenty-one states have declined to adopt the deduction. Georgia has partially conformed to it.
The No Tax on Tips deduction allows eligible workers to deduct up to $25,000 in qualified tip income from their federal taxable income each year. It covers tax years 2025 through 2028.
Whether a state extends the No Tax on Tips deduction to its own income tax depends largely on how it conforms to the federal tax code.
