HF1365

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.

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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