Bill > HB860

This bill modifies the Missouri state income tax code to provide two new tax deductions for workers starting in the 2026 tax year. Specifically, the bill allows 100% deduction of income received as overtime compensation and 100% deduction of tips for employees in occupations that traditionally receive tips. For overtime compensation and tips, the bill also eliminates employer withholding requirements except as mandated by federal law. The bill defines "tips" using the Fair Labor Standards Act definition, referring to customary additional payments made to employees in service industries. These deductions are part of a broader set of modifications to Missouri's adjusted gross income calculations, which already include various other specific income subtractions such as military benefits, agricultural disaster payments, and certain grant moneys. The goal appears to be providing financial relief to workers in industries with significant overtime or tip-based compensation by reducing their state tax burden.

Budget and Finance, Government Affairs

https://house.mo.gov/Bill.aspx?bill=HB860&year=2025&code=R