Individual income tax subtraction provided for gratuities paid to employees.

HF 417 modifies Minnesota's individual income tax code to exclude tips (gratuities paid to employees) from taxable income. This change directly affects service industry workers, such as restaurant staff, who receive tips as part of their earnings. The bill amends Minnesota Statutes section 290.0132 by adding a new provision stating that tip amounts are a subtraction from taxable income, meaning these earnings will not be subject to state income tax. The provision takes effect for tax years beginning after December 31, 2024.