HF 2968

as introduced - 89th Legislature (2015 - 2016) Posted on 03/14/2016 03:12pm

A bill for an act
relating to homeowner and renter property tax refunds; modifying the definition
of income; amending Minnesota Statutes 2014, section 290A.03, subdivision 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 290A.03, subdivision 3, is amended to read:

Subd. 3.

Income.

deleted text begin (1) deleted text end new text begin (a) new text end "Income" means the sum of the following:

deleted text begin (a) deleted text end new text begin (1) new text end federal adjusted gross income as defined in the Internal Revenue Code; and

deleted text begin (b) deleted text end new text begin (2) new text end the sum of the following amounts to the extent not included in clause (a):

(i) all nontaxable income;

(ii) the amount of a passive activity loss that is not disallowed as a result of section
469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
loss carryover allowed under section 469(b) of the Internal Revenue Code;

(iii) an amount equal to the total of any discharge of qualified farm indebtedness
of a solvent individual excluded from gross income under section 108(g) of the Internal
Revenue Code;

(iv) cash public assistance and relief;

(v) any pension or annuity (including railroad retirement benefits, all payments
received under the federal Social Security Act, Supplemental Security Income, and
veterans benefits), which was not exclusively funded by the claimant or spouse, or which
was funded exclusively by the claimant or spouse and which funding payments were
excluded from federal adjusted gross income in the years when the payments were made;

(vi) interest received from the federal or a state government or any instrumentality
or political subdivision thereof;

(vii) workers' compensation;

(viii) nontaxable strike benefits;

(ix) the gross amounts of payments received in the nature of disability income or
sick pay as a result of accident, sickness, or other disability, whether funded through
insurance or otherwise;

(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1995;

(xi) contributions made by the claimant to an individual retirement account,
including a qualified voluntary employee contribution; simplified employee pension plan;
self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
of the Internal Revenue Code; or deferred compensation plan under section 457 of the
Internal Revenue Code, to the extent the sum of amounts exceeds the retirement base
amount for the claimant and spouse;

(xii) to the extent not included in federal adjusted gross income, distributions received
by the claimant or spouse from a traditional or Roth style retirement account or plan;

(xiii) nontaxable scholarship or fellowship grants;

(xiv) the amount of deduction allowed under section 199 of the Internal Revenue
Code;

(xv) the amount of deduction allowed under section 220 or 223 of the Internal
Revenue Code;

(xvi) the amount deducted for tuition expenses under section 222 of the Internal
Revenue Code; and

(xvii) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code.

In the case of an individual who files an income tax return on a fiscal year basis, the
term "federal adjusted gross income" shall mean federal adjusted gross income reflected
in the fiscal year ending in the calendar year. Federal adjusted gross income shall not be
reduced by the amount of a net operating loss carryback or carryforward or a capital loss
carryback or carryforward allowed for the year.

deleted text begin (2) deleted text end new text begin (b) new text end "Income" does not include:

deleted text begin (a) deleted text end new text begin (1) new text end amounts excluded pursuant to the Internal Revenue Code, sections 101(a)
and 102;

deleted text begin (b) deleted text end new text begin (2) new text end amounts of any pension or annuity which was exclusively funded by the
claimant or spouse and which funding payments were not excluded from federal adjusted
gross income in the years when the payments were made;

deleted text begin (c) deleted text end new text begin (3) new text end to the extent included in federal adjusted gross income, amounts contributed
by the claimant or spouse to a traditional or Roth style retirement account or plan, but not
to exceed the retirement base amount reduced by the amount of contributions excluded
from federal adjusted gross income, but not less than zero;

deleted text begin (d) deleted text end new text begin (4) new text end surplus food or other relief in kind supplied by a governmental agency;

deleted text begin (e) deleted text end new text begin (5) new text end relief granted under this chapter;

deleted text begin (f) deleted text end new text begin (6) new text end child support payments received under a temporary or final decree of
dissolution or legal separation; or

deleted text begin (g) deleted text end new text begin (7) new text end restitution payments received by eligible individuals and excludable interest
as defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
2001, Public Law 107-16.

deleted text begin (3) deleted text end new text begin (c) new text end The sum of the following amounts may be subtracted from income:

deleted text begin (a) deleted text end new text begin (1) new text end for the claimant's first dependent, the exemption amount multiplied by 1.4;

deleted text begin (b) deleted text end new text begin (2) new text end for the claimant's second dependent, the exemption amount multiplied by 1.3;

deleted text begin (c) deleted text end new text begin (3) new text end for the claimant's third dependent, the exemption amount multiplied by 1.2;

deleted text begin (d) deleted text end new text begin (4) new text end for the claimant's fourth dependent, the exemption amount multiplied by 1.1;

deleted text begin (e) deleted text end new text begin (5) new text end for the claimant's fifth dependent, the exemption amount; deleted text begin and
deleted text end

new text begin (6) if the claimant was disabled or reached the age of 65 on or before December 31
of the year for which the taxes were levied or rent paid, the exemption amount multiplied
by 1.4; and
new text end

deleted text begin (f) if the claimant or deleted text end new text begin (7) if the new text end claimant's spouse was disabled or attained the age
of 65 on or before December 31 of the year for which the taxes were levied or rent paid,
the exemption amount new text begin multiplied by 1.4 new text end .

For purposes of this subdivision, the "exemption amount" means the exemption
amount under section 151(d) of the Internal Revenue Code for the taxable year for which
the income is reported; "retirement base amount" means the deductible amount for the
taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal
Revenue Code, adjusted for inflation as provided in section 219(b)(5)(D) of the Internal
Revenue Code, without regard to whether the claimant or spouse claimed a deduction;
and "traditional or Roth style retirement account or plan" means retirement plans under
sections 401, 403, 408, 408A, and 457 of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims based on property taxes
payable in 2017 and rent paid in 2016 and following years.
new text end