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SF 1332

Subtraction provision for overtime pay

2025-2026 Regular Session Introduced by Gary Dahms and 3 co-sponsors

SF 1332 allows taxpayers to subtract overtime pay from Minnesota taxable income, providing tax relief for workers earning overtime wages.

Chief author added Heintzeman
#revenuedepartment #taxation #taxation-income
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Bill Summary · SF 1332

Summary of SF 1332: Subtraction provision for overtime pay

Bill Overview

SF 1332 is a legislative bill that aims to provide a subtraction from Minnesota taxable income for certain overtime pay received by employees. The bill is intended to provide tax relief for workers who earn overtime wages.

Key Provisions

  • Allows taxpayers to subtract from their Minnesota taxable income the amount of overtime pay they received during the tax year
  • Defines "overtime pay" as compensation paid to an employee for hours worked in excess of 40 hours per week, at a rate of at least 1.5 times the employee's regular hourly rate
  • The subtraction applies to both employees of private businesses as well as state and local government workers
  • There is no income limit or phase-out for eligibility - the subtraction can be claimed regardless of the taxpayer's total income level

Impact and Timeline

  • If enacted, this bill would reduce the state income tax burden for Minnesotans who earn overtime pay, potentially providing hundreds or thousands of dollars in annual tax savings for affected workers
  • The bill was introduced on February 13, 2025 and has been assigned to the Senate Taxes committee for consideration. Its companion bill, HF 1365, has been introduced in the Minnesota House of Representatives.
  • If passed by the legislature and signed into law, the overtime pay subtraction would take effect for tax years beginning after December 31, 2025.

Conclusion

SF 1332 is a tax relief measure intended to ease the burden on Minnesota workers who put in extra hours and earn overtime pay. By allowing them to subtract that income from their state taxable income, the bill aims to provide financial benefits to a wide range of employees across the private and public sectors.

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

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