Tip income exemption from the individual income tax and tax withholding requirements provision

SF 1006 would exempt reported tip income from Minnesota's individual income tax. Specifically, it adds a new "tip income" subtraction to the tax code, meaning tips that workers already report to their employers (as required by federal law) won't be counted as taxable income. This directly affects tipped workers, such as servers and bartenders, who currently report tips to employers under federal rules. The exemption applies to taxable years beginning after December 31, 2024, and does not change how tips are reported to employers or the IRS.