This bill amends Minnesota Statutes to provide specific subtractions from individual income 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 makes changes to withholding provisions in sections 290.091 and 290.92. It updates the definition of alternative minimum taxable income to include the new subtractions and removes outdated language regarding tips from withholding requirements. A new subdivision is also added to exempt tip income from withholding requirements, ensuring that tips, as defined in the bill, are not subject to withholding. These changes aim to simplify tax calculations and provide relief to individuals earning these types of income, effective for taxable years starting after December 31, 2024.

Statutes affected:
Introduction: 290.0132, 290.091, 290.92