MADISON – During Thursday’s Assembly floor session, Representative Karen Hurd (R-Withee) supported legislation that would provide tax relief for hardworking Wisconsinites. One bill would exempt tips from taxation while another would allow an income tax subtraction for overtime pay, both subject to certain restrictions.
Assembly Bill (AB) 38 would provide tipped workers with a state income tax exclusion of up to $25,000 of their tipped income for tax years 2025-2028. This matches what was done at the federal level in the “One Big Beautiful Bill Act,” that was signed into law by President Trump last year.
“This proposal simplifies the system and delivers real tax relief to tens of thousands of tipped workers across the state,” said Rep. Hurd. “Those who work in the service industry are a critical part of a strong economy and I am pleased to support legislation that allows them to keep more of their hard-earned tips.”
Currently overtime income is taxed the same way as regular income. AB 461 will allow workers to subtract $12,500 of overtime earnings each year from their taxable income (or $25,000 for married joint filers). In addition to the financial benefit for workers, it will help keep our economy strong by rewarding workers who take jobs that may require overtime.
“While working overtime results in a larger paycheck, it also comes at a cost of more time away from home and family,” said Rep. Hurd. “By allowing this income tax subtraction for overtime pay we are saying thank you to the workers who go above and beyond their normal work hours by allowing them to keep more of what they earn.”
