1. (a) This section applies to the taxable year beginning after December 31, 2025, and ending before January 1, 2027.
2. (b) A taxpayer is entitled to a deduction from the taxpayer's adjusted gross income in an amount equal to the amount associated with qualified overtime compensation that is deducted from a taxpayer's federal adjusted gross income under Section 225 of the Internal Revenue Code.

3. (c) If a taxpayer has both qualified overtime compensation that is included in the taxpayer's adjusted gross income and qualified overtime compensation that is not included in the taxpayer's adjusted gross income, the deduction for purposes of this article and IC 6-3.6 shall be equal to the qualified overtime compensation deducted from the taxpayer's federal adjusted gross income under Section 225 of the Internal Revenue Code multiplied by the quotient of:

   1. (1) the qualified overtime compensation included in the taxpayer's adjusted gross income after the application of any other exemption, deduction, or exclusion of qualified tips from the taxpayer's adjusted gross income under this article or IC 6-3.6 ; divided by

   2. (2) the qualified overtime compensation included in the taxpayer's federal adjusted gross income.

      This subsection shall be applied separately to this article and IC 6-3.6 to the extent that the taxpayer's adjusted gross income is determined separately for each article.

As added by P.L.128-2026, SEC.12.