STATEHOUSE – Legislation supported by State Rep. Chris May (R-Bedford) to deliver tax cuts for Hoosiers is heading to the governor’s desk for consideration as a law.
Under Senate Enrolled Act 243, Hoosiers can deduct qualifying tips and overtime pay from their state taxable income for 2026. May said this move provides immediate financial relief and more take-home pay for many workers, including those in hospitality, retail, health care, and other sectors of the service industry.
“Eliminating taxes on tips and overtime will give a big boost to hardworking Hoosiers,” May said. “This is a pro-worker policy that will put more money in people’s pockets.”
May said this legislation aligns Indiana with President Donald Trump’s federal One Big Beautiful Bill Act of 2025 to deliver meaningful tax relief at both the state and federal levels. In addition to allowing deductions for tips and overtime, the measure helps address the phaseout of the penny by giving retailers the option to round cash transactions up or down to the nearest five cents, while clarifying taxation rules to prevent confusion for consumers and businesses.
SEA 243 also streamlines Indiana’s adoption tax credit application, making it easier for foster and adoptive families to access critical financial support.
To learn more about legislation passed by the General Assembly, click here.
