MADISON – The Wisconsin Assembly convened on Thursday afternoon to provide income tax relief to the working class. Rep. Rodriguez (R-Oak Creek) joined the majority of her colleagues in supporting the package.
The federal “One Big Beautiful Bill Act” provided tipped workers with an income tax exclusion of up to $25,000 worth of their tipped income from Tax Years 2025 through 2028. Assembly Bill 38 (AB 38) applies this policy for state income tax purposes, as well. This is expected to reduce state income tax collections by roughly $50 million a year for the years the exclusion is effective.
“Aligning state tax policy with federal tax policy is good public policy, and will simplify tax season for tipped workers,” explained Rep. Rodriguez. “A restaurant from my district that I love taking visitors to – Erv’s Mug – actually came to the Capitol to testify in favor of this bill back in August of last year. I’m proud to take this bipartisan win back home to them.”
Assembly Bill 461 (AB 461) provides an income tax exclusion of up to $12,500 for individuals ($25,000 for married couples filing jointly) on overtime pay. This is expected to cut taxes by approximately $150 million annually.
“Across Wisconsin, our economy depends on people who consistently step up and work overtime when they’re needed most. My community has a lot of healthcare workers and a rich history in manufacturing. Whether it’s nurses working an extra shift at the hospital or line workers staying late to meet production goals, these extra hours are essential to our community and local economy – but they can take a toll on a person’s home-life. This bill recognizes the hardworking Wisconsinites working overtime, allowing them to keep more of those hard-earned overtime dollars,” concluded Rodriguez.
The bills now go to the Senate for consideration before heading to the Governor for his signature.
