This bill amends Section 422.7 of the Iowa Code to exclude overtime pay from the individual income tax. Specifically, it introduces a new subsection that allows individuals to subtract the portion of their compensation that is earned at a rate of not less than one and one-half times their regular rate, as authorized by U.S.C. 207.

The provisions of this bill will take effect for tax years beginning on or after January 1, 2026. This change aims to provide tax relief to workers who earn overtime pay, thereby potentially increasing their take-home income.

Statutes affected:
Introduced: 422.7