Bill > HB126

This bill amends Delaware's personal income tax laws to provide a temporary tax exemption for overtime wages earned by full-time hourly employees. Specifically, for tax years beginning January 1, 2026, and ending before January 1, 2028, employees will not be required to pay state income tax on compensation received for work performed beyond 40 hours in a week. The bill also requires employers to submit detailed reporting to the Division of Revenue, including the total amount of overtime wages paid and the number of employees receiving such wages. Employers must provide this data for the 2025 tax year by January 31, 2026, and for subsequent years along with their regular withholding returns. The Division of Revenue is mandated to report this collected data to several state officials, including the Controller General, Director of the Office of Management and Budget, Secretary of the Department of Finance, and the Division of Legislative Services. The Division is also authorized to create regulations to implement and enforce this new overtime wage tax exemption provision.

Budget and Finance

https://legis.delaware.gov/BillDetail?LegislationId=142144