House Bill 26-013

This bill establishes a refundable state child tax credit and exempts qualifying tip income and certain gig-based earnings from state income taxation beginning in tax year 2027. The bill is intended to provide targeted financial relief to working families, service industry employees, and individuals earning income through app-based or independent contractor work.

The legislation creates a refundable child tax credit available to eligible taxpayers for each qualifying child, with credit amounts and income eligibility thresholds determined through annual appropriations. The credit is designed to supplement existing federal tax benefits and provide support to low- and moderate-income households.

In addition, the bill exempts tip income and qualifying gig income — including earnings from rideshare, delivery, and other digital platform-based work — from state income taxation. Employers and platform companies must continue reporting income for informational purposes, and the Department of Revenue is directed to adopt rules to prevent misclassification of wages as exempt income.

The bill also requires the Department of Revenue to evaluate the fiscal and economic impacts of the tax changes and report findings to the Governor and the General Assembly.