Statewide, Iowa (RI) – Bills ready for debate in the Iowa House would implement tax breaks on tips and overtime pay at the state level, similar to those President Trump has proposed at the federal level.
One bill would eliminate the state income tax on up to $25,000 worth of tips for Iowans with an annual income under $155,000. Representative David Young of Van Meter says it removes the paperwork burden for workers who earn tips and paperwork for their employers. It would also be an income boost for Iowans who depend on tips for their income.
Another bill would eliminate the state income tax on overtime pay. Representative Mike Sexton of Rockwell City says he heard about this issue from voters during the fall campaign.
The tax break on overtime pay would be for employees asked to work more than 40 hours in a week — and earn higher pay during overtime hours that’s at least one-and-a-half times their regular hourly rate.
These bills on tips and overtime pay got “yes” votes from all the Republicans and Democrats on the House Ways and Means Committee this past Wednesday. There’s no analysis on how much these tax breaks would be worth to Iowa workers, and no estimate of how much state revenue would dip if tipped workers and employees paid to work overtime get these tax breaks.
KIWA Staff Photo
