Bill > HF1365

This bill proposes to create a new tax subtraction for overtime pay for Minnesota state income tax purposes. Specifically, the bill allows taxpayers to subtract from their taxable income any wages, salaries, tips, or other compensation earned for hours worked beyond the standard workweek as defined by federal labor laws (specifically the Fair Labor Standards Act, which typically sets the standard workweek at 40 hours). By creating this subtraction, the bill aims to provide a tax benefit for workers who earn overtime pay, effectively reducing their state income tax liability. The provision would take effect for taxable years beginning after December 31, 2024, meaning taxpayers would first be able to claim this subtraction on their 2025 state income tax returns. This type of tax provision is designed to provide financial relief to workers who put in extra hours and potentially incentivize overtime work by offering a tax advantage.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF1365&ssn=0&y=2025