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HF1368 (Legislative Session 94 (2025-2026))

Tip income exempted from the individual income tax and tax withholding requirements.

Related bill: SF1525

AI Generated Summary

This Minnesota House bill (H.F. No. 1368) proposes to exempt tip income from individual state income tax and from tax withholding requirements.

Key Provisions:

  1. Exemption of Tip Income:

    • The bill adds a new subdivision to Minnesota Statutes Section 290.0132, specifying that income earned from tips would be subtracted when determining taxable individual income.

  2. Definition of Tip Income:

    • "Tips" are defined as amounts reported by an employee to their employer, as required under Section 6053(a) of the Internal Revenue Code, or reported directly to the IRS as wages subject to employer tax payment requirements under Section 3121(q) of the Internal Revenue Code.

  3. Tax Withholding Changes:

    • The bill also amends Minnesota Statutes Section 290.92 to remove the requirement for employers to withhold taxes on reported tip income.

If passed, this bill would provide financial relief to tipped workers by excluding their tip earnings from state income taxation and eliminating employers' obligation to withhold state taxes on those tips.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 23, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references the federal requirements for reporting tip income by employees to employers under section 6053(a) of the Internal Revenue Code.",
      "modified": []
    },
    "citation": "6053(a)"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references employer tax payment obligations for reported tip income under section 3121(q) of the Internal Revenue Code.",
      "modified": []
    },
    "citation": "3121(q)"
  }
]

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