Assembly Bill 461 proposes an income tax subtraction for certain qualified overtime compensation, aligning with the definition provided in the Internal Revenue Code. This qualified overtime compensation refers to overtime pay exceeding a claimant's regular rate of pay under the federal Fair Labor Standards Act. To qualify for the subtraction, claimants must report their social security number on their tax return, and married individuals must file jointly. The bill sets a limit of $12,500 for individual claimants and $25,000 for those filing jointly, with a phase-out of the subtraction as modified federal adjusted gross income increases from $150,000 to $275,000 for individuals, and from $300,000 to $550,000 for joint filers.

Additionally, the bill amends current law regarding the definition of income for the homestead credit by including the newly created subtraction for qualified overtime compensation. This change will take effect for taxable years beginning after December 31, 2024. The bill aims to provide tax relief for workers receiving overtime pay, thereby encouraging fair compensation practices while ensuring compliance with federal tax regulations.

Statutes affected:
Bill Text: 71.52(6), 71.52