Illinois HB2734 creates an income tax deduction for overtime compensation included in federal adjusted gross income.

HB2734 amends the Illinois Income Tax Act to introduce a deduction for overtime compensation paid to taxpayers during the taxable year, provided it is included in their federal adjusted gross income. This deduction applies to taxable years beginning on or after January 1, 2026, and is exempt from certain provisions of Section 250. The bill specifies that "overtime compensation" is defined according to the federal Fair Labor Standards Act. This change aims to align state tax treatment with federal standards for overtime pay.

Illinois HB2734 creates an income tax deduction for overtime compensation included in federal adjusted gross income.

HB2734 amends the Illinois Income Tax Act to introduce a deduction for overtime compensation paid to taxpayers during the taxable year, provided it is included in their federal adjusted gross income. This deduction applies to taxable years beginning on or after January 1, 2026, and is exempt from certain provisions of Section 250. The bill specifies that "overtime compensation" is defined according to the federal Fair Labor Standards Act. This change aims to align state tax treatment with federal standards for overtime pay.