Menu
Virginia workers who receive tips from their employment could benefit from a proposed tax relief initiative announced by Gov. Glenn Youngkin.
On Monday, Youngkin unveiled a budget proposal to exempt service tips from Virginia’s state income tax. The goal is to lower the cost of living for working families across the Commonwealth.
“We have delivered over $5 billion in tax relief to date, and we remain committed to lowering the cost of living for hardworking Virginians. It’s their money, not the government’s,” Youngkin said.
Watch related coverage: Additional $290M to go towards school construction
The Virginia Department of Taxation and the Virginia Employment Commission estimate that more than 250,000 Virginians in the food service, personal service, and hospitality industries could benefit from the proposed tax relief.
“By removing tips from taxable income, it will directly increase the take-home pay of hundreds of thousands of Virginians and give them more buying power, which in turn will improve financial stability, stimulate local economies, and honor the value of their hard work,” Youngkin added.
Under the proposed plan, Virginians who earn tips will be able to claim a deduction on their state tax return, provided the income is included in their federal adjusted gross income.
“Virginia’s tipped employees in the hospitality and restaurant industries do an amazing job every day to help our Commonwealth welcome visitors and locals alike to our nation-leading restaurants, hotels, campgrounds, and attractions. Helping these team members keep more of the tips that they earn in their pockets will be a welcome relief as consumer costs continue to put pressure on everyday families. We are committed to working with the Youngkin Administration and the Virginia General Assembly to make sure that this proposal is as responsible and impactful for Virginia’s tipped employees as it can be,” said Eric Terry, president of the VRLTA.
The Department of Taxation will use IRS data and employer-reported W-2 information to ensure compliance.
More political news
Kelsey Jones
Colter Anstaett
Brendan Ponton
Maggi Marshall
Kadia Tubman
Brendan Ponton
Kadia Tubman
Web Staff
