An Act To Amend Title 30 Of The Delaware Code Relating To Personal Income Tax Credits Applicable To Overtime Income.
Summary
SB299 would add a new personal income tax credit for Delaware resident individuals on overtime income earned under the federal Fair Labor Standards Act. The bill provides a credit of up to $15,000 for overtime compensation paid for hours worked over 40 in a week, and it applies only to resident taxpayers. The credit is designed to benefit workers who earn overtime pay, while excluding higher-income taxpayers through a phaseout structure.
The credit begins to phase out when modified adjusted gross income exceeds $125,000 for single filers or $250,000 for joint filers, and it is fully phased out at $150,000 for single filers or $300,000 for joint filers. In practical terms, the bill would amend Title 30 of the Delaware Code by creating a new section governing this overtime-related credit and would reduce state income tax liability for eligible residents who work substantial overtime hours.
Impact
If enacted, SB299 would create a new Delaware personal income tax credit in Title 30 for overtime earnings, directly affecting resident individual income tax returns. It would lower state tax collections from eligible taxpayers and add a new statutory provision tied to overtime compensation under the federal Fair Labor Standards Act. The bill would primarily affect working residents who receive overtime pay, while limiting the benefit for higher-income filers through income-based phaseouts.
Sentiment
Based on the available materials, the bill appears to have a generally supportive or favorable framing, with multiple sponsors from both chambers listed on the measure. The synopsis presents the proposal as a targeted tax benefit for workers who earn overtime, suggesting a pro-worker policy rationale. No committee transcript or recorded vote information is available in the provided context, so there is no documented opposition or formal debate to assess beyond the bill text itself.
Contention
The main policy issue is the size and targeting of the credit. Supporters are likely to view the bill as a way to reward overtime work and provide tax relief to middle-income workers, while potential critics may question the fiscal cost of a $15,000 credit and whether the income thresholds are appropriately set. Another possible point of contention is that the credit applies only to Delaware residents and only to overtime paid under the federal law, which may exclude some workers or create administrative complexity for taxpayers and the state.