Bill > SF1488

This bill proposes to exempt tip income from individual income tax and tax withholding requirements in Minnesota, starting in the 2025 tax year. Specifically, the legislation defines "tips" as amounts an individual reports to their employer (as required by federal tax law) or directly to the Internal Revenue Service as wages subject to employer taxes. Under this bill, tips would be considered a tax subtraction, meaning they would not be included in an individual's taxable income. Additionally, the bill removes existing provisions about tax withholding for tips, effectively creating a complete exemption from both income taxation and withholding for tip earnings. This change could provide financial relief for workers in industries where tips are a significant part of their compensation, such as restaurants, bars, and other service-related businesses, by allowing them to keep a larger portion of their tip income without tax deductions.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=Senate&f=SF1488&ssn=0&y=2025