Evers Vetoes Tip and Overtime Tax Relief Bills Today

What would it feel like to see more cash from a Sunday night shift land in your bank account? For many Wisconsin workers, that question just lost one legislative answer after a tax veto stopped two recent proposals.

Gov. Tony Evers on Friday vetoed bills that would have exempted tips and some overtime pay from state income tax. “Meaningful tax relief for working people is a serious undertaking, and I have been clear from the get-go that my expectation is that when we provide tax relief, it should be real, responsible, and targeted to the middle class,” Evers wrote in his veto message. “We must also stay well within our means by still ensuring our tax policy changes are sustainable and will not force us to cut services or raise taxes down the road.”

Under one measure, cash and charged tips would have been exempt for tax year 2025 through tax year 2028. The other bill would have allowed workers to deduct up to $12,500 in overtime pay for single filers and up to $25,000 for joint filers. The federal version of the overtime provision is set to sunset after tax year 2028, while this state bill carried no expiration date. Evers had also proposed eliminating the state income tax on cash tips as part of his 2025-27 state budget proposal, but Republicans on the Legislature’s Joint Finance Committee removed it early and did not return it to the budget.

A short, strategic moment: the GOP bills passed the Legislature with some Democratic support, and the political fallout could shape the governor’s race this year.

Evers said he vetoed the GOP tips bill because it tied the state policy to the federal law and he opposed “effectively ceding control over the direction of state policy to Congress.” He also objected to the overtime exemption for another reason, arguing against “changing the tax code in a way that will treat Wisconsin workers who earn similar wages differently just because of their classification as salaried or hourly workers.” That argument highlights a deeper tension between targeted relief and fairness in tax treatment; treating similar earners differently could complicate withholding and enforcement while creating new disputes about worker classification.

Political stakes are immediate. Earlier this week, U.S. Rep. Tom Tiffany, the Republican gubernatorial frontrunner, said he would sign these bills into law if elected, a statement noted. “Madison has taken far too much from working people for far too long,” Tiffany said in a statement. “Whether you’re a food server, bartender, nurse, firefighter, machine operator, or construction worker, you should keep more of your paycheck, and as governor, I will make sure of that.” Evers is not seeking reelection to a third term.

A recent US News Hub Misryoum report found the state’s tax burden has hit record lows in recent years and is in the bottom 16 nationally. That broader fiscal picture helps explain Evers’ caution; while voters may welcome relief, policymakers must weigh revenue impacts on schools and local services. If lawmakers want to revisit these measures, they will need to balance the promise of immediate take-home pay gains against long-term budget stability.

The tax veto leaves the Legislature and the next governor with choices. Lawmakers can try to craft a narrower, revenue-neutral approach or pursue more permanent, broad-based reform that avoids disparate treatment of similar earners. For now, the issue remains a partisan and practical puzzle heading into an election year, where rhetoric about paychecks meets the technicalities of tax law.

Jessie Opoien can be reached at jessie.opoien@jrn.com.