Bill > HB2234

This bill creates a new state income tax subtraction for overtime pay in Oregon, allowing taxpayers to exclude from their state taxable income any amount earned from overtime hours that meets specific criteria. Specifically, the overtime pay must be: (1) attributable to hours worked beyond standard work hours, (2) required to be compensated as overtime hours under labor regulations, and (3) properly reported on the taxpayer's federal income tax return. The tax subtraction will apply to tax years beginning on or after January 1, 2026, and before January 1, 2032, effectively providing a temporary tax benefit to workers who earn overtime. The bill will become effective 91 days after the 2025 regular session of the Oregon Legislative Assembly adjourns sine die (a legal term meaning the session ends without setting a day to reconvene). By creating this tax subtraction, the bill aims to provide financial relief to workers who earn extra income through overtime, potentially incentivizing overtime work and offering some tax savings to employees.

Budget and Finance

https://olis.oregonlegislature.gov/liz/2025R1/Measures/Overview/HB2234