HF 4861

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/13/2024 12:17pm

A bill for an act
relating to taxation; individual income; modifying the itemized deduction to exclude
certain charitable contributions; amending Minnesota Statutes 2023 Supplement,
section 290.0122, subdivision 2.

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

Section 1.

Minnesota Statutes 2023 Supplement, section 290.0122, subdivision 2, is
amended to read:

Subd. 2.

Deductions limited; inflation adjustment.

(a) The itemized deductions of a
taxpayer with adjusted gross income over $220,650 are reduced by the lesser of:

(1) three percent of the excess of the taxpayer's adjusted gross income over $220,650
but not over $304,970; plus ten percent of the taxpayer's adjusted gross income over
$304,970; or

(2) 80 percent of the amount of the taxpayer's itemized deductions.

(b) Notwithstanding paragraph (a), for a taxpayer with adjusted gross income over
$1,000,000, a taxpayer's itemized deductions are reduced by 80 percent.

(c) For a married individual filing a separate return, the reduction under paragraph (a)
must be calculated using one-half of the adjusted gross income amounts specified in that
paragraph.

(d) For the purposes of this subdivision, "itemized deductions" means the itemized
deductions otherwise allowable to the taxpayer under subdivision 1, except itemized
deductions excludes:

(1) the portion of the deduction for interest under subdivision 5 that represents investment
interest;

(2) the deduction for medical expenses under subdivision 6; deleted text begin and
deleted text end

(3) the deduction for losses under subdivision 8 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (4) the deduction for charitable contributions under subdivision 4.
new text end

(e) For taxable years beginning after December 31, 2023, the commissioner must adjust
for inflation the adjusted gross income amounts under paragraphs (a) and (b) as provided
in section 270C.22. The statutory year is taxable year 2023. The amounts as adjusted must
be rounded down to the nearest $50 amount. The threshold amount for married individuals
filing separate returns must be one-half of the adjusted amount for married individuals filing
joint returns.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2023.
new text end