Bill > HF417

This bill amends Minnesota's income tax law to create a new tax subtraction for gratuities (tips) paid to employees. Specifically, the bill allows individuals to subtract the amount of gratuities from their taxable income, referencing the definition of gratuities found in Minnesota Statutes section 177.23, subdivision 9. This means that tips received by employees will be excluded from their state income tax calculation, potentially reducing the total amount of state income tax owed. The provision will take effect for tax years beginning after December 31, 2024, giving taxpayers a new method to reduce their state income tax burden. By creating this subtraction, the bill aims to provide financial relief to employees who receive tips as part of their compensation, such as workers in service industries like restaurants, bars, and other customer service roles.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF0417&ssn=0&y=2025