Relating to establishing an additional modification reducing federal adjusted gross income relating to taxes on tips and overtime

This bill creates a tax break for West Virginia taxpayers who earn tips or overtime income. For 2026-2028, it allows taxpayers to subtract federal deductions for qualified tips and overtime from their state taxable income. Starting in 2029, it caps the tip deduction at $25,000 annually and overtime at $12,500 annually, phasing out the break for taxpayers with modified adjusted gross income over $150,000. Nonresidents only qualify for the break if their tips or overtime were earned while working in West Virginia.