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HF 3619

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/21/2022 02:50pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to taxation; individual income; providing a subtraction for public safety
pension benefits; amending Minnesota Statutes 2020, section 290.0132, by adding
a subdivision.

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

Section 1.

Minnesota Statutes 2020, section 290.0132, is amended by adding a subdivision
to read:


new text begin Subd. 31. new text end

new text begin Public safety pension benefits. new text end

new text begin (a) The amount of a taxpayer's public safety
pension exclusion is a subtraction.
new text end

new text begin (b) The amount of a taxpayer's federal exclusion is determined as follows:
new text end

new text begin (1) for a taxpayer whose provisional income is less than or equal to the base amount,
the federal exclusion equals 100 percent of qualified benefits received during the taxable
year;
new text end

new text begin (2) for a taxpayer whose provisional income exceeds the base amount, but is less than
or equal to the adjusted base amount, the federal exclusion equals the lesser of:
new text end

new text begin (i) 50 percent of qualified benefits received during the taxable year; or
new text end

new text begin (ii) the amount by which the taxpayer's provisional income exceeds the base amount;
and
new text end

new text begin (3) for a taxpayer whose provisional income exceeds the adjusted base amount, the
federal exclusion equals the lesser of:
new text end

new text begin (i) 85 percent of the taxpayer's provisional income in excess of the adjusted base amount,
plus 50 percent of the difference between the base amount and the adjusted base amount;
or
new text end

new text begin (ii) 85 percent of qualified benefits received during the taxable year.
new text end

new text begin (c) The amount of a taxpayer's state exclusion equals the lesser of:
new text end

new text begin (1) the amount of qualified benefits in excess of the taxpayer's federal exclusion; or
new text end

new text begin (2) the maximum exclusion for a taxpayer determined under paragraph (d).
new text end

new text begin (d) The maximum state exclusion equals $5,450 for a joint return, half that amount for
a married taxpayer filing a separate return, and $4,260 for all other taxpayers. The maximum
subtraction is reduced by 20 percent of provisional income in excess of:
new text end

new text begin (1) $82,770 for a joint return;
new text end

new text begin (2) half the amount in clause (1) for a married taxpayer filing a separate return; and
new text end

new text begin (3) $64,670 for all other filers.
new text end

new text begin (e) For the purposes of this subdivision:
new text end

new text begin (1) "base amount" has the meaning given in section 86(c)(1) of the Internal Revenue
Code and "adjusted base amount" has the meaning given in section 86(c)(2) of the Internal
Revenue Code;
new text end

new text begin (2) "provisional income" has the meaning given in section 290.0132, subdivision 26,
paragraph (e);
new text end

new text begin (3) "public safety pension exclusion" means the sum of the federal exclusion calculated
under paragraph (b) and the state exclusion calculated under paragraphs (c) and (d); and
new text end

new text begin (4) "qualified benefits" means retirement annuity, disability benefits, survivor benefits,
or other benefits paid under section 352B.08, 352B.10, 352B.11, or sections 353.63 to
353.68.
new text end

new text begin (f) The commissioner must adjust the maximum exclusion and phaseout threshold
amounts in paragraph (d) as provided in section 270C.22. The statutory year is taxable year
2022. The maximum subtraction and threshold amounts as adjusted must be rounded to the
nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10
amount.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end