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HF1365 (Legislative Session 94 (2025-2026))

Individual income tax subtraction provided for overtime pay.

Related bill: SF1332

AI Generated Summary

Purpose

The bill would create a new subtraction from Minnesota individual income tax equal to overtime pay, providing tax relief for workers who earn overtime.

Main Provisions

  • Adds Subdivision 36 to Minnesota Statutes 2024 section 290.0132.
  • Subdivision 36. Overtime pay:
    • The amount of overtime pay is a subtraction from income for tax purposes.
    • Overtime pay is defined as wages, salaries, tips, and other employee compensation earned for hours worked in any workweek in excess of the maximum workweek applicable to the employee under:
    • Minnesota law (chapter 177), or
    • United States Code, title 29, section 207 (federal overtime rule).
  • This means taxpayers can subtract the amount of overtime pay earned beyond the applicable maximum workweek when calculating Minnesota individual income tax.

How It Works (Tax Calculation Effect)

  • The subtraction reduces taxable income by the amount of overtime pay earned in a workweek beyond the defined maximum, rewarding workers who receive overtime compensation.
  • Applies to overtime pay as defined above, using either the state or federal maximum workweek standards.

Significant Changes to Existing Law

  • Amends Minnesota Statutes 2024 section 290.0132 by adding a new Subdivision 36 (Overtime pay), creating a targeted subtraction for overtime earnings.

Effective Date and Implementation

  • The provided text does not specify an effective date; applicability would depend on bill enactment and any associated implementing provisions.

Relevant Terms - overtime pay - subtraction - wages - salaries - tips - employee compensation - workweek - maximum workweek - chapter 177 - 29 U.S.C. § 207 - Minnesota Statutes 2024 section 290.0132 - Subd. 36 - individual income tax

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 24, 2025HouseActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Adds Subd. 36 (Overtime pay) to section 290.0132.",
        "Defines overtime pay as wages, salaries, tips, and other employee compensation earned for hours worked in any workweek in excess of the maximum workweek applicable to the employee under chapter 177 or 29 U.S.C. § 207."
      ],
      "removed": [],
      "summary": "This bill adds Subd. 36 to Minn. Stat. 2024 section 290.0132 to create an overtime pay subtraction for individual income tax.",
      "modified": [
        "Minnesota Statutes 2024 section 290.0132 is amended to add Subd. 36."
      ]
    },
    "citation": "290.0132",
    "subdivision": "Subd. 36"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Chapter 177 of the Minnesota Statutes is referenced in the definition of the maximum workweek relevant to the overtime pay subtraction.",
      "modified": []
    },
    "citation": "177",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Cites 29 U.S.C. § 207 as the federal basis for overtime definitions."
      ],
      "removed": [],
      "summary": "The bill references the federal overtime standard under the Fair Labor Standards Act, specifically 29 U.S.C. § 207.",
      "modified": []
    },
    "citation": "29 U.S.C. § 207",
    "subdivision": ""
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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