Hutton Bill Eliminating Overtime Tax Clears Key Senate Committees

MADISON – Legislation by State Senator Rob Hutton (R–Brookfield) that eliminates Wisconsin’s income tax on overtime earnings cleared two key Senate committees in recent days, setting the bill up for a Senate floor vote and action by the Governor.

Senate Bill 454 and its companion legislation, Assembly Bill 461, create a state income-tax subtraction for overtime pay so that earnings over the normal rate of pay according to the federal Fair Labor Standards Act are not taxed. The bill saves Wisconsin taxpayers approximately $150 million each year.

“When Wisconsinites step up to cover extra shifts and keep our communities running, the tax code shouldn’t punish that effort,” Hutton said. “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.”

Under the proposal, overtime pay reported on required wage statements would be eligible for a state tax subtraction at tax time. Like the federal provision, the bill includes reasonable income limits to focus relief on workers most likely to rely on overtime. It is written to conform to the Internal Revenue Code as amended last year under the One Big Beautiful Bill Act, minimizing conflicts between state and federal tax codes.

“Families need that money more than the government. This bill is a practical step to returning the state’s surplus to those who earned it and ensuring Wisconsin citizens keep more of their hard-earned income,” Hutton said.

AB 461 was approved by the Assembly in a bipartisan vote in January. It was approved by the Senate Committee on Agriculture and Revenue on Friday and the Joint Committee on Finance on Monday. After a final committee vote Tuesday, the bill will be ready to head to the full Senate and then to the desk of Governor Evers.

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.