Establishing additional modification reducing federal adjusted gross income relating to taxes on tips and overtime

SB 492 creates a new tax deduction for West Virginia residents, reducing their taxable income based on federal deductions for qualified tips and overtime pay. For tax years 2026-2028, it allows a deduction equal to federal tip and overtime deductions claimed on federal returns. Starting in 2029, it limits the deduction to $25,000 annually for tips and $12,500 for overtime, phasing out for taxpayers with modified adjusted gross income over $150,000. Nonresidents can only claim deductions for work performed in West Virginia. The bill directly affects service industry workers and overtime earners who itemize federal deductions.