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H11 • 2025

No Tax on Tips, Overtime, Bonus Pay.

No Tax on Tips, Overtime, Bonus Pay.

Taxes
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Warren, Bell, Chesser, Paré, Almond, Arp, Balkcom, Biggs, Brody, Campbell, Carver, Clampitt, Cohn, Cotham, Dixon, Echevarria, Eddins, Gillespie, Goodwin, K. Hall, Hastings, Humphrey, Huneycutt, Iler, Johnson, B. Jones, Kidwell, Liu, Loftis, Lowery, McNeely, Miller, Moss, Potts, Pyrtle, Reeder, Rhyne, Riddell, Ross, Schietzelt, Scott, Strickland, Turner, Wheatley, White, Willis, Zenger
Last action
2025-03-11
Official status
Re-ref Com On Finance
Effective date
Not listed

Plain English Breakdown

Using official source text because the generated explanation was unavailable or could not be confirmed against the official bill text.

No Tax on Tips, Overtime, Bonus Pay.

H11-SMTM-4(e1)-v-4 (2025-02-26): No Tax on Tips, Overtime, Bonus Pay.

What This Bill Does

  • H11-SMTM-4(e1)-v-4 (2025-02-26): No Tax on Tips, Overtime, Bonus Pay.

Limits and Unknowns

  • This entry is temporarily using official source text because the generated explanation could not be confirmed against the official bill text during the last sync.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

Filed

Plain English: 2025-2026 General Assembly HOUSE BILL 11: No Tax on Tips, Overtime, Bonus Pay.

  • 2025-2026 General Assembly HOUSE BILL 11: No Tax on Tips, Overtime, Bonus Pay.
  • Committee: House Commerce and Economic Development.
  • If favorable, re-refer to Finance.
  • If favorable, re -refer to Rules, Calendar, and Operations of the House Date: February 25, 2025 Introduced by: Reps.

Bill History

  1. 2025-03-11 House

    Re-ref Com On Finance

  2. 2025-03-11 House

    Reptd Fav

  3. 2025-02-03 House

    Re-ref to the Com on Commerce and Economic Development, if favorable, Finance, if favorable, Rules, Calendar, and Operations of the House

  4. 2025-02-03 House

    Withdrawn From Com

  5. 2025-01-30 House

    Ref To Com On Rules, Calendar, and Operations of the House

  6. 2025-01-30 House

    Passed 1st Reading

  7. 2025-01-29 House

    Filed

Official Summary Text

H11-SMTM-4(e1)-v-4
(2025-02-26): No Tax on Tips, Overtime, Bonus Pay.

Current Bill Text

Read the full stored 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 I NCOME 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 joi nt 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 qualif y 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