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H 3173

An Act relative to taxes on overtime wages

194th Legislature (2025-2026) Introduced by Marc Lombardo

Bill H 3173 allows Massachusetts hourly employees to deduct overtime wages from taxable income, reducing their tax burden and promoting fairness in taxation.

Accompanied a study order, see H5313
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Bill Summary · H 3173

Summary of Bill H 3173: An Act Relative to Taxes on Overtime Wages

Purpose and Intent

Bill H 3173 aims to amend the tax treatment of overtime wages in the Commonwealth of Massachusetts. The primary intent of the bill is to provide clarity on what constitutes overtime wages and to allow taxpayers to deduct these wages from their taxable income, potentially reducing their overall tax burden.

Key Provisions

The bill includes the following significant changes to the Massachusetts General Laws:

  1. Definition of Overtime Wages:

    • The bill defines "overtime wage" as wages paid to hourly employees for hours worked in excess of 40 hours per week.
    • It explicitly states that wages earned by salaried employees do not qualify as overtime wages.

  2. Tax Deduction for Overtime Wages:

    • An amendment to Chapter 62, Section 3 of the General Laws will allow taxpayers to deduct an amount equal to the overtime wages earned within the taxable year from their taxable income.

Who Would Be Affected

  • Hourly Employees: The bill primarily benefits hourly employees who work overtime, as it allows them to reduce their taxable income based on their overtime earnings.
  • Taxpayers: Individuals filing taxes in Massachusetts will have the opportunity to lower their tax liabilities if they earn overtime wages.
  • Employers: Employers may need to adjust their payroll systems to accurately report overtime wages for tax purposes.

Procedural Aspects

  • Introduced: The bill was introduced on February 27, 2025, by Representative Marc T. Lombardo of the 22nd Middlesex District.
  • Committee Review: Following its introduction, the bill was referred to the Committee on Revenue.
  • Hearing Scheduled: A hearing is scheduled for November 18, 2025, from 10:00 AM to 1:00 PM in Room A-1, where stakeholders can provide input on the bill.

Conclusion

Bill H 3173 seeks to clarify the tax implications of overtime wages for hourly employees in Massachusetts. By allowing a deduction for overtime earnings, the bill aims to alleviate some of the tax burdens on workers who put in extra hours, thereby promoting fairness in the tax system. The upcoming hearing will provide an opportunity for further discussion and evaluation of the bill's potential impacts.

Compiled from official sources — confirm details with the bill’s official record.

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