Withholding of federal income tax from state employee pay prohibited.

HF 3612 prohibits Minnesota state agencies from withholding federal income tax from state employee paychecks. It directly affects all Minnesota state employees whose salaries are processed through the commissioner of management and budget or agency payroll systems. The bill adds a new provision to Minnesota law requiring that federal tax not be deducted during payroll processing and repeals the existing statute (Minnesota Statutes 16A.13) that previously governed this tax withholding process. This changes the state's payroll procedure for federal tax obligations for employees.