HF 1588

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/20/2023 06:58pm

A bill for an act
relating to taxation; property tax refunds; increasing maximum refunds and
expanding eligibility for refunds; expanding the exemption amount for senior
claimants and claimants with a disability; amending Minnesota Statutes 2022,
sections 290A.03, subdivision 3; 290A.04, subdivisions 2, 4.

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

Section 1.

Minnesota Statutes 2022, section 290A.03, subdivision 3, is amended to read:

Subd. 3.

Income.

(a) "Income" means the sum of the following:

(1) federal adjusted gross income as defined in the Internal Revenue Code; and

(2) the sum of the following amounts to the extent not included in clause (1):

(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) alimony received to the extent not included in the recipient's income;

(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.

(b) "Income" does not include:

(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;

(2) 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;

(3) 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;

(4) surplus food or other relief in kind supplied by a governmental agency;

(5) relief granted under this chapter;

(6) child support payments received under a temporary or final decree of dissolution or
legal separation;

(7) 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;

(8) alimony paid; or

(9) veterans disability compensation paid under title 38 of the United States Code.

(c) The sum of the following amounts may be subtracted from income:

(1) for the claimant's first dependent, the exemption amount multiplied by 1.4;

(2) for the claimant's second dependent, the exemption amount multiplied by 1.3;

(3) for the claimant's third dependent, the exemption amount multiplied by 1.2;

(4) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;

(5) for the claimant's fifth dependent, the exemption amount; and

(6) if the claimant or claimant's spouse had a disability 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 1.5 new text end .

(d) For purposes of this subdivision, the following terms have the meanings given:

(1) "exemption amount" means the exemption amount under section 290.0121,
subdivision 1, paragraph (b), for the taxable year for which the income is reported;

(2) "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)(C) of the Internal Revenue Code, without regard
to whether the claimant or spouse claimed a deduction; and

(3) "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 beginning with claims based on rent paid
in 2023 and property taxes payable in 2024.
new text end

Sec. 2.

Minnesota Statutes 2022, section 290A.04, subdivision 2, is amended to read:

Subd. 2.

Homeowners; homestead credit refund.

A claimant whose property taxes
payable are in excess of the percentage of the household income stated below shall pay an
amount equal to the percent of income shown for the appropriate household income level
along with the percent to be paid by the claimant of the remaining amount of property taxes
payable. The state refund equals the amount of property taxes payable that remain, up to
the state refund amount shown below.

Household Income	Percent of Income	Percent Paid by Claimant	Maximum State Refund
deleted text begin $0 to 1,739 deleted text end new text begin $0 to $1,920 new text end	1.0 percent	15 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 1,740 to 3,459 deleted text end new text begin $1,921 to $3,820 new text end	1.1 percent	15 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 3,460 to 5,239 deleted text end new text begin $3,821 to $5,790 new text end	1.2 percent	15 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 5,240 to 6,989 deleted text end new text begin $5,791 to $7,730 new text end	1.3 percent	20 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 6,990 to 8,719 deleted text end new text begin $7,731 to $9,640 new text end	1.4 percent	20 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 8,720 to 12,219 deleted text end new text begin $9,641 to $13,510 new text end	1.5 percent	20 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 12,220 to 13,949 deleted text end new text begin $13,511 to $15,420 new text end	1.6 percent	20 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 13,950 to 15,709 deleted text end new text begin $15,421 to $17,370 new text end	1.7 percent	20 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 15,710 to 17,449 deleted text end new text begin $17,371 to $19,290 new text end	1.8 percent	20 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 17,450 to 19,179 deleted text end new text begin $19,291 to $21,200 new text end	1.9 percent	25 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 19,180 to 24,429 deleted text end new text begin $21,201 to $27,010 new text end	2.0 percent	25 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 24,430 to 26,169 deleted text end new text begin $27,011 to $28,930 new text end	2.0 percent	30 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 26,170 to 29,669 deleted text end new text begin $28,931 to $32,800 new text end	2.0 percent	30 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 29,670 to 41,859 deleted text end new text begin $32,801 to $46,270 new text end	2.0 percent	35 percent	$	deleted text begin 2,770 deleted text end new text begin 3,560 new text end
deleted text begin 41,860 to 61,049 deleted text end new text begin $46,271 to $67,490 new text end	2.0 percent	35 percent	$	deleted text begin 2,240 deleted text end new text begin 2,980 new text end
deleted text begin 61,050 to 69,769 deleted text end new text begin $67,491 to $77,130 new text end	2.0 percent	40 percent	$	deleted text begin 1,960 deleted text end new text begin 2,670 new text end
deleted text begin 69,770 to 78,499 deleted text end new text begin $77,131 to $86,780 new text end	2.1 percent	40 percent	$	deleted text begin 1,620 deleted text end new text begin 2,290 new text end
deleted text begin 78,500 to 87,219 deleted text end new text begin $86,781 to $96,420 new text end	2.2 percent	40 percent	$	deleted text begin 1,450 deleted text end new text begin 2,100 new text end
deleted text begin 87,220 to 95,939 deleted text end new text begin $96,421 to $106,060 new text end	2.3 percent	40 percent	$	deleted text begin 1,270 deleted text end new text begin 1,900 new text end
deleted text begin 95,940 to 101,179 deleted text end new text begin $106,061 to $111,850 new text end	2.4 percent	45 percent	$	deleted text begin 1,070 deleted text end new text begin 1,680 new text end
deleted text begin 101,180 to 104,689 deleted text end new text begin $111,851 to $115,730 new text end	2.5 percent	45 percent	$	deleted text begin 890 deleted text end new text begin 1,480 new text end
deleted text begin 104,690 to 108,919 deleted text end new text begin $115,731 to $120,410 new text end	2.5 percent	50 percent	$	deleted text begin 730 deleted text end new text begin 1,310 new text end
deleted text begin 108,920 to 113,149 deleted text end new text begin $120,411 to $125,080 new text end	2.5 percent	50 percent	$	deleted text begin 540 deleted text end new text begin 1,100 new text end
new text begin $125,081 to $135,000 new text end	new text begin 2.6 percent new text end	new text begin 50 percent new text end	new text begin $ new text end	new text begin 850 new text end
new text begin $135,001 to $145,000 new text end	new text begin 2.7 percent new text end	new text begin 50 percent new text end	new text begin $ new text end	new text begin 600 new text end
new text begin $145,001 to $155,000 new text end	new text begin 2.8 percent new text end	new text begin 50 percent new text end	new text begin $ new text end	new text begin 350 new text end

The payment made to a claimant shall be the amount of the state refund calculated under
this subdivision. No payment is allowed if the claimant's household income is deleted text begin $113,150 deleted text end new text begin
$155,001 new text end or more.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims based on property taxes payable
in 2024 and following years.
new text end

Sec. 3.

Minnesota Statutes 2022, section 290A.04, subdivision 4, is amended to read:

Subd. 4.

Inflation adjustment.

The commissioner shall annually adjust the dollar
amounts of the income thresholds and the maximum refunds under subdivisions 2 and 2a
as provided in section 270C.22. new text begin The statutory year for subdivision 2 is 2023. new text end The statutory
year new text begin for subdivision 2a new text end is 2018.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims based on property taxes payable
in 2025 and following years.
new text end