This bill amends Minnesota Statutes to provide specific subtractions from individual income tax for various types of earnings, including overtime pay, tips, bonuses, and winnings from nonprofit lawful gambling organizations. New subdivisions are added to section 290.0132, defining these terms and establishing that they qualify as subtractions from taxable income. The definitions clarify that overtime pay includes compensation for hours worked beyond the maximum workweek, tips are amounts reported to employers or the IRS, bonuses are supplemental wage payments, and winnings are from licensed gambling organizations. Each of these provisions is effective for taxable years beginning after December 31, 2024.

Additionally, the bill modifies withholding provisions in section 290.091 and section 290.92. It updates the definitions related to alternative minimum taxable income and allows for changes in withholding requirements, including an exemption for tip income from withholding requirements. The bill also removes outdated language regarding the treatment of tips in the withholding process. These changes aim to simplify tax calculations and ensure that certain types of income are treated more favorably for tax purposes, effective for taxable years starting after December 31, 2024.

Statutes affected:
Introduction: 290.0132, 290.091, 290.92