Excluding overtime pay from the individual income tax, and including applicability provisions

Where it is now

1. ✓
   Done: IntroducedJanuary 22, 2025
2. ✓
   Done: SubcommitteeJanuary 23, 2025
3. ✓
   Done: House committeeApril 16, 2025
4. Next: Passes the House
5. Next: Senate committeeFunnel: by March 20, 2026
6. Next: Passes the Senate
7. Next: To the Governor
8. Next: Signed into law

Became HF 1024 → Its progress continues under the new number. Go to HF 1024 What’s a funnel?

What’s in it

This bill excludes overtime pay from the individual income tax. The bill excludes from the individual income tax the portion of compensation that is authorized pursuant to U.S.C. §207 to be earned at not less than one and one-half times the regular rate at which the person is employed. The bill applies to tax years beginning on or after January 1, 2026.

From the explanation printed with the bill as introduced, written by the Legislative Services Agency. Amendments adopted later aren’t reflected. Full bill text

House subcommittee

Named January 23, 2025. On January 29, 2025 it recommended passage.

• Rep. Michael V. Sexton R
• Rep. Brooke Boden REmail
• Rep. Scheetz

Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part

Fiscal note

The exemption in HF 1024 will decrease revenue to the General Fund by the following amounts: • FY 2026 = $48.4 million • FY 2027 = $94.4 million • FY 2028 = $96.6 million • FY 2029 = $98.8 million • FY 2030 = $101.1 million • FY 2031 = $103.4 million The decrease in tax liability is also projected to decrease the statewide local option income surtax for schools by the following amounts: • FY 2026 = $0 • FY 2027 = $2.3 million • FY 2028 = $2.4 million • FY 2029 = $2.4 million • FY 2030 = $2.5 million • FY 2031 = $2.6 million

• Income Tax Exemption, Overtime Pay · April 22, 2025

Nonpartisan cost estimates from the Legislative Services Agency’s Fiscal Services Division. The newest is first. Reading a fiscal note

Iowa Code it changes

Amends§422.7

Read from the bill as introduced. Each links to every bill touching that chapter of the Iowa Code. How the Code works

Family tree

Where this legislation came from and where it went: earlier tries, the versions it moved through this Assembly, and later bills built on it.

Earlier and later bills are matched by wording or an identical title; check the text to be sure it’s the same idea.