HF 4005

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxes; individual income; increasing the elderly subtraction; amending
Minnesota Statutes 2004, section 290.0802, subdivision 2.

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

Section 1.

Minnesota Statutes 2004, section 290.0802, subdivision 2, is amended to
read:

Subd. 2.

Subtraction.

(a) A qualified individual is allowed a subtraction from
federal taxable income of the individual's subtraction base amount. The excess of the
subtraction base amount over the taxable net income computed without regard to the
subtraction for the elderly or disabled under section 290.01, subdivision 19b, clause (4),
may be used to reduce the amount of a lump sum distribution subject to tax under section
290.032.

(b)(1) The initial subtraction base amount equals

deleted text begin (i) $12,000 for a married taxpayer filing a joint return if a spouse is a qualified
individual,
deleted text end

deleted text begin (ii) $9,600 for a single taxpayer, and
deleted text end

deleted text begin (iii) $6,000 for a married taxpayer filing a separate federal return.
deleted text end

new text begin (i) for a married taxpayer filing a joint return if one spouse is a qualified individual,
for a married taxpayer filing a separate federal return, or for a single taxpayer, $12,970; and
new text end

new text begin (ii) for a married taxpayer filing a joint return if both spouses are qualified
individuals, twice the amount provided in paragraph (b), clause (1), item (i).
new text end

(2) The qualified individual's initial subtraction base amount, then, must be reduced
by the sum of nontaxable retirement and disability benefits and one-half of the amount of
adjusted gross income in excess of the following thresholds:

deleted text begin (i) $18,000 for a married taxpayer filing a joint return if both spouses are qualified
individuals,
deleted text end

deleted text begin (ii) $14,500 for a single taxpayer or for a married couple filing a joint return if only
one spouse is a qualified individual, and
deleted text end

deleted text begin (iii) $9,000 for a married taxpayer filing a separate federal return.
deleted text end

new text begin (i) for a married taxpayer filing a joint return if one spouse is a qualified individual,
for a married taxpayer filing a separate federal return, or for a single taxpayer, $19,590; and
new text end

new text begin (ii) for a married taxpayer filing a joint return if both spouses are qualified
individuals, twice the amount provided in paragraph (b), clause (2), item (i).
new text end

(3) In the case of a qualified individual who is under the age of 65, the maximum
amount of the subtraction base may not exceed the taxpayer's disability income.

(4) The resulting amount is the subtraction base amount.

new text begin (c) For taxable years beginning after December 31, 2006, the initial subtraction
base amounts and thresholds under paragraph (b) must be adjusted for inflation. The
commissioner shall make the inflation adjustments in accordance with section 1(f) of the
Internal Revenue Code except that for the purposes of this subdivision the percentage
increase must be determined from the year starting September 1, 2005, and ending August
31, 2006, as the base year for adjusting for inflation for the tax year beginning after
December 31, 2006. The determination of the commissioner under this subdivision is not
a rule under the Administrative Procedure Act.
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, 2005.
new text end