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Primary Sponsor

Last Action

Re-ref Com On Finance2025-03-11

Vote Breakdown

No floor votes recorded.

Plain Language Summary

This bill allows North Carolina taxpayers to deduct overtime compensation, tips, and up to $2,500 in annual bonus pay from their state income tax. The deductions apply to income that would normally be taxed, effectively reducing the amount of state income tax owed by workers who receive these forms of compensation.

Arguments in Favor

• •Supporters argue this bill helps working people keep more of their earnings by reducing taxes on compensation tied to extra effort or employer recognition.
• •They contend that overtime, tips, and bonuses are forms of work-based income that deserve special consideration, and that this deduction provides meaningful relief for service workers, hourly employees, and others who rely on these income sources.

Arguments Against

• •Opponents may argue this bill reduces state tax revenue that funds schools, roads, and other public services, requiring either budget cuts or other taxes to compensate.
• •They may also question whether the benefit is fairly distributed, since not all workers receive tips, overtime, or bonuses, and whether a $2,500 bonus cap creates arbitrary distinctions between taxpayers.