(The Center Square) – A group of Wisconsin lawmakers is proposing to end state income tax on overtime earnings.
The bill would subtract the income tax on overtime and have workers instead pay income tax on the normal rate of pay. The bill is intended to conform to federal Internal Revenue Code requirements.
The bill is sponsored by state Sen. Rob Hutton, R-Brookfield along with Reps. Paul Melotik, Bob Donovan, and Benjamin Franklin, and Sens. Van Wanggaard and Julian Bradley.
“When Wisconsinites step up to cover extra shifts and keep our communities running, the tax code shouldn’t punish that effort,” Hutton said in a statement. “This bill helps workers keep more of what they earn and supports employers across sectors—from manufacturing and health care to public safety and hospitality.”
The bill would have what authors call “reasonable limits” on the exception in order to benefit workers that are most likely to rely on overtime. The idea has been proposed before in Wisconsin but not implemented.
“We’re aligning with federal definitions to keep things simple and ensure there aren’t compliance headaches for workers or employers at tax time,” Hutton said. “This bill is a practical step to ensure hard-working Wisconsinites keep more of what they earn.”
