MS
Does Mississippi tax tips and overtime?
The federal deduction and the Mississippi deduction are separate questions. Here is where Mississippi actually lands, and why.
How Mississippi builds its tax base
Mississippi calculates its own tax base rather than importing a federal figure, so the federal deduction never enters the computation at all. Any relief here is a state provision in its own right, with its own rules and limits.
Tips in Mississippi
Still taxedMississippi does not import any federal number. Miss. Code Ann. 27-7-15 defines Mississippi "gross income" independently, and Form 80-105 builds its own total income from separate line items (wages/salaries/tips, business income, capital gain, rents/royalties/passthroughs, farm income, interest, dividends, alimony, pensions, unemployment, other income), totals it, applies Mississippi-specific adjustments, and produces "Mississippi adjusted gross income" - it never begins at federal AGI or federal taxable income. Because nothing federal flows in, a below-the-line federal deduction such as IRC 224 has zero effect on Mississippi tax, and Mississippi has enacted no exclusion or deduction for tip income. Caveat: I found no affirmative Mississippi DOR statement on OBBBA, so this is a structural/legislative-record conclusion rather than published state guidance.
Source: Miss. Code Ann. 27-7-15 (Gross income defined); Mississippi Form 80-105 Resident Individual Income Tax Return, income section lines 38-49 and "Mississippi adjusted gross income" line 66 · last reviewed
Overtime in Mississippi
Still taxedSame own-base mechanism: IRC 225 is below-the-line and Mississippi computes its own gross income, so the federal overtime deduction cannot reduce Mississippi tax. Mississippi has enacted no overtime exclusion - HB 504 (2025 Regular Session), "Income tax; exclude overtime compensation from gross income," which would have amended Miss. Code 27-7-15 to exclude FLSA-required overtime, died in committee on 26 Feb 2025, and no successor has been enacted through the 2026 session. Same caveat: no MS DOR guidance located.
Source: Mississippi HB 504 (2025 Regular Session) - amends Miss. Code 27-7-15 to exclude FLSA overtime compensation from gross income; died in committee 26 Feb 2025 · last reviewed
Whatever your state does, your payroll taxes do not change
Both deductions reduce income tax only. Social Security and Medicare are still charged on the same wages, in every state.
This entry rests on a reputable secondary source rather than a Mississippi revenue department publication or an enacted bill. Treat it as reliable but confirm before you file.