North Carolina HB 11: No Tax on Tips, Overtime, Bonus Pay.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 11

Short Title: No Tax on Tips, Overtime, Bonus Pay. (Public)
Sponsors: Representatives Warren, Bell, Chesser, and Paré (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Rules, Calendar, and Operations of the House
January 30, 2025
*H11-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ALLOW AN INCOME TAX DEDUCTION FOR OVERTIME 2
COMPENSATION, UP TO TWO THOUSAND FIVE HUNDRED DOLLARS OF BONUS 3
PAY, AND TIPS. 4
The General Assembly of North Carolina enacts: 5
SECTION 1. G.S. 105-153.5(b) reads as rewritten: 6
"(b) Other Deductions. – In calculating North Carolina taxable income, a taxpayer may 7
deduct from the taxpayer's adjusted gross income any of the following items that are included in 8
the taxpayer's adjusted gross income: 9
... 10
(17) Any amount received as overtime compensation pursuant to sections 206 and 11
207 of the Fair Labor Standards Act, as amended. In the case of a married 12
couple filing a joint return, each spouse may qualify separately for the 13
deduction allowed under this subdivision. To claim this deduction, the 14
taxpayer shall provide any information required by the Secretary. 15
(18) The amount received as bonus pay not to exceed two thousand five hundred 16
dollars ($2,500). For purposes of this subdivision, "bonus pay" means 17
supplemental wages, as defined in 26 C.F.R. § 31.3402(g)-1, not including 18
tips, paid to an employee as a cash award and in recognition of the employee's 19
outstanding work, suggestions, or similar workplace dedication. In the case of 20
a married couple filing a joint return, each spouse may qualify separately for 21
the deduction allowed under this subdivision. To claim this deduction, the 22
taxpayer shall provide any information required by the Secretary. 23
(19) Any amount received as tips that are required to be reported to the taxpayer's 24
employer pursuant to section 6053(a) of the Code." 25
SECTION 2. This act is effective for taxable years beginning on or after January 1, 26
2025. 27