A bill for an act excluding overtime pay from the individual income tax, and including applicability provisions.(Formerly HF 110.)
Impact
The bill is set to take effect for tax years beginning on or after January 1, 2026. If enacted, this change could significantly impact the financial landscape for Iowa residents, particularly those who regularly work overtime. Proponents of the bill argue that exempting overtime pay from income taxation will incentivize more employees to work extra hours, thereby increasing productivity and income retention at the individual level. This intended benefit aligns with a broader objective of enhancing the economic well-being of working families.
Summary
House File 1024 is proposed legislation aimed at excluding overtime pay from individual income tax calculations. By amending Section 422.7 of the Iowa Code, the bill specifies that compensation earned for overtime, defined as pay at not less than one and one-half times the regular rate under the Fair Labor Standards Act (29 U.S.C. 207), will be exempt from state individual income tax. This legislative move aims to provide financial relief to workers who earn overtime by not subjecting their additional income to state taxation.
Contention
Notably, discussions surrounding HF1024 may encompass points of contention regarding the implications of tax policy changes on state revenues. Opponents may voice concerns that exempting overtime pay from taxation could lead to decreased funding for public services and could disproportionately benefit higher-income individuals who are more likely to earn overtime. Additionally, questions of fairness and the potential impact on state-funded programs might arise, emphasizing the need for a thorough examination of how such tax exemptions influence overall economic equity and state budget planning.
A bill for an act excluding nonqualified deferred compensation income from the individual income tax, and including retroactive applicability provisions.(Formerly HF 2105.)
A bill for an act relating to individual and corporate income taxes, the insurance premium tax, and including the contingent repeal of the individual income tax, and including retroactive applicability and effective date provisions.(Formerly SSB 1126.)
A bill for an act excluding nonqualified deferred compensation income from the individual income tax, and including retroactive applicability provisions.(See HF 2638.)
A bill for an act providing a deduction from the individual and corporate income taxes for the amount of certain income derived from indigent representation by an eligible law firm, and including retroactive applicability provisions. (Formerly HF 2504.)
A bill for an act relating to state taxation by modifying alternate and individual income tax rates, and including effective date and retroactive applicability provisions.(Formerly SSB 3038.)
A bill for an act excluding the net capital gain from the sale of certain livestock from the computation of net income for purposes of the individual income tax, and including retroactive applicability provisions. (Formerly HSB 680.) Effective date: 07/01/2024. Applicability date: 01/01/2023.
A bill for an act excluding the net capital gain from the sale of certain livestock from the computation of net income for purposes of the individual income tax, and including retroactive applicability provisions.(See HF 2649.)
A bill for an act excluding the net capital gain from the sale of certain livestock from the computation of net income for purposes of the individual income tax, and including retroactive applicability provisions.
A bill for an act relating to the farm tenancy net income exclusion available against the individual income tax, and including effective date and retroactive applicability provisions.(Formerly HF 2503.)
A bill for an act modifying the computation of net income for the individual income tax related to the capital gain or loss from the sale of bullion, coins, and currency, and including applicability provisions.(Formerly HF 659, HF 208.)