This bill proposes an amendment to section 77-2716 of the Revised Statutes Cumulative Supplement, 2024, to introduce a new income tax adjustment specifically for income received from overtime compensation. The aim is to provide more favorable tax treatment for individuals earning overtime pay, potentially reducing their overall tax burden. The original section will be repealed, indicating a significant restructuring of how income tax adjustments are currently managed.

In addition to the overtime compensation adjustment, the bill modifies federal adjusted gross income for individuals, estates, and trusts by allowing specific deductions related to various income types, including military retirement benefits, social security benefits, and educational savings plan contributions. It also permits individuals to subtract amounts received as student loan repayment assistance, health insurance premiums paid by retired firefighters or law enforcement officers, and annuities from the Civil Service Retirement System. Furthermore, it provides tax relief for Nebraska National Guard members and addresses medical debt by allowing reductions in federal adjusted gross income for discharged medical debt. A key insertion in the bill is the provision allowing individuals to subtract income received from overtime compensation under the Fair Labor Standards Act starting January 1, 2025.

Statutes affected:
Introduced: 77-2716