SF587
Paid gratuities to employees tax subtraction provision
Legislative Session 94 (2025-2026)
Related bill: HF417
AI Generated Summary
Purpose
- Create a new subtraction ( deduction) in Minnesota individual income tax for gratuities (tips) paid to employees.
- Align the definition of gratuities with existing state law.
Main Provisions
- Adds Subdivision 36 to Minnesota Statutes 2024 section 290.0132.
- Subd. 36.1 (Tips/gratuities): The amount of gratuities is a subtraction from taxable income.
- Subd. 36.2: For purposes of this subdivision, gratuities have the meaning given in section 177.23 subdivision 9.
Significant Changes to Existing Law
- Establishes a new allowed subtraction specifically for gratuities (tips) paid to employees when calculating Minnesota individual income tax.
- Defines gratuities consistently with an existing Minnesota statute (177.23 subdivision 9).
Potential Implications
- Could reduce taxable income by the amount of gratuities, affecting tax liability for filers who report gratuities.
- Clarifies how gratuities are defined and treated under the state income tax code.
Relevant Terms gratuities tips subtraction (subtraction from taxable income) Minnesota Statutes 2024 section 290.0132 Subdivision 36 (Subd. 36) Gratuities definition in section 177.23 subdivision 9 177.23 subdivision 9
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| January 27, 2025 | Senate | Action | Introduction and first reading | ||
| January 27, 2025 | Senate | Action | Referred to | Taxes | |
| Showing the 5 most recent stages. This bill has 2 stages in total. Log in to view all stages | |||||
Citations
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Progress through the legislative process
In Committee
Sponsors
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