1.1 	A bill for an act
1.2 	relating to taxation; making technical and clarifying changes to indexing of certain 
1.3 	amounts;amending Minnesota Statutes 2018, sections 270A.03, subdivision 5; 
1.4 	290.0131, subdivisions 12, 13; 290.0132, subdivision 26; 290.06, subdivisions 2c, 
1.5 	2d; 290.067, subdivision 2b; 290.0671, subdivisions 1, 7; 290.0684, subdivision 
1.6 	2; 290.091, subdivision 3; 290.0922, subdivision 1; 290A.03, subdivision 12; 
1.7 	290A.04, subdivision 4; proposing coding for new law in Minnesota Statutes, 
1.8 	chapter 270C.
1.9 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10 	Section 1. Minnesota Statutes 2018, section 270A.03, subdivision 5, is amended to read:
1.11 		Subd. 5.Debt; debtor. (a) "Debt" means a legal obligation of a natural person to pay a 
1.12 	fixed and certain amount of money, which equals or exceeds $25 and which is due and 
1.13 	payable to a claimant agency. The term includes criminal fines imposed under section 609.10
1.14 	or 609.125, fines imposed for petty misdemeanors as defined in section 609.02, subdivision 
1.15 	4a, and restitution. A debt may arise under a contractual or statutory obligation, a court 
1.16 	order, or other legal obligation, but need not have been reduced to judgment.
1.17 	A debt includes any legal obligation of a current recipient of assistance which is based 
1.18 	on overpayment of an assistance grant where that payment is based on a client waiver or 
1.19 	an administrative or judicial finding of an intentional program violation; or where the debt 
1.20 	is owed to a program wherein the debtor is not a client at the time notification is provided 
1.21 	to initiate recovery under this chapter and the debtor is not a current recipient of food support, 
1.22 	transitional child care, or transitional medical assistance.
1.23 	(b) A debt does not include any legal obligation to pay a claimant agency for medical 
1.24 	care, including hospitalization if the income of the debtor at the time when the medical care 
1.25 	was rendered does not exceed the following amount:
2.1 	(1) for an unmarried debtor, an income of $12,560 or less;
2.2 	(2) for a debtor with one dependent, an income of $16,080 or less;
2.3 	(3) for a debtor with two dependents, an income of $19,020 or less;
2.4 	(4) for a debtor with three dependents, an income of $21,580 or less;
2.5 	(5) for a debtor with four dependents, an income of $22,760 or less; and
2.6 	(6) for a debtor with five or more dependents, an income of $23,730 or less.
2.7 	For purposes of this paragraph, "debtor" means the individual whose income, together 
2.8 	with the income of the individual's spouse, other than a separated spouse, brings the 
2.9 	individual within the income provisions of this paragraph. For purposes of this paragraph, 
2.10 	a spouse, other than a separated spouse, shall be considered a dependent.
2.11 	(c) The commissioner shall annually adjust the income amounts in paragraph (b) by the 
2.12 	percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue 
2.13 	Code, except that in section 1(f)(3)(B) the word "2014" shall be substituted for the word 
2.14 	"1992." For 2016, the commissioner shall then determine the percent change from the 12 
2.15 	months ending on August 31, 2014, to the 12 months ending on August 31, 2015, and in 
2.16 	each subsequent year, from the 12 months ending on August 31, 2014, to the 12 months 
2.17 	ending on August 31 of the year preceding the taxable year. The determination of the 
2.18 	commissioner pursuant to this subdivision shall not be considered a "rule" and shall not be 
2.19 	subject to the Administrative Procedure Act contained in chapter 14. The income amount 
2.20 	as adjusted must be rounded to the nearest $10 amount. If the amount ends in $5, the amount 
2.21 	is rounded up to the nearest $10 amount as provided in section 270C.22.
2.22 	(d) Debt also includes an agreement to pay a MinnesotaCare premium, regardless of the 
2.23 	dollar amount of the premium authorized under section 256L.15, subdivision 1a.

2.24 	EFFECTIVE DATE. This section is effective for adjustments beginning with taxable 
2.25 	years beginning after December 31, 2019.

2.26 	Sec. 2. [270C.22] COST OF LIVING ADJUSTMENT.
2.27 		Subdivision 1.Adjustment; definition; period; rounding. (a) The commissioner shall 
2.28 	annually make a cost of living adjustment to the dollar amounts noted in sections that 
2.29 	reference this section. The commissioner shall adjust the amounts based on the index as 
2.30 	provided in this section. For purposes of this section, "index" means the ....... published by 
2.31 	the Bureau of Labor Statistics and the values of the index used to determine the adjustments 
2.32 	under this section are the latest published values when the Bureau of Labor Statistics 
3.1 	publishes the initial value of the index for August of the year preceding the year to which 
3.2 	the adjustment applies.
3.3 	(b) To determine the dollar amounts for taxable year 2020, calendar year 2020, and for 
3.4 	refunds payable in 2020 under chapter 290A, the commissioner shall determine the 
3.5 	percentage change in the index for the 12-month period ending on August 31, 2018, and 
3.6 	increase each of the unrounded dollar amounts in the sections referencing this section, as 
3.7 	determined by the commissioner under the previously applicable cost of living adjustment 
3.8 	for 2019, by that percentage change. For each subsequent year, the commissioner shall 
3.9 	increase the dollar amount by the percentage change in the index for the 12-month period 
3.10 	ending in August of the year preceding the year.
3.11 	(c) Unless provided otherwise, the commissioner shall round the amounts as adjusted 
3.12 	to the nearest $10 amount. If an amount ends in $5, the amount is rounded up to the nearest 
3.13 	$10 amount.
3.14 		Subd. 2.Publication. The commissioner shall announce and publish the adjusted dollar 
3.15 	amounts as required by subdivision 1 on the Department of Revenue's website on or before 
3.16 	December 15 of each year.
3.17 		Subd. 3.Special provision. The determination of the commissioner under this subdivision 
3.18 	is not a rule and is not subject to the Administrative Procedure Act under chapter 14, 
3.19 	including section 14.386.

3.20 	EFFECTIVE DATE. This section is effective for adjustments beginning with taxable 
3.21 	years beginning after December 31, 2019.

3.22 	Sec. 3. Minnesota Statutes 2018, section 290.0131, subdivision 12, is amended to read:
3.23 		Subd. 12.Disallowed itemized deductions. (a) The amount of disallowed itemized 
3.24 	deductions is an addition. The amount of disallowed itemized deductions, plus the addition 
3.25 	required under subdivision 3, may not be more than the amount by which the itemized 
3.26 	deductions, as allowed under section 63(d) of the Internal Revenue Code, exceeds the amount 
3.27 	of the standard deduction as defined in section 63(c) of the Internal Revenue Code.
3.28 	(b) The amount of disallowed itemized deductions is equal to the lesser of:
3.29 	(1) three percent of the excess of the taxpayer's federal adjusted gross income over the 
3.30 	applicable amount; or
3.31 	(2) 80 percent of the amount of the itemized deductions otherwise allowable to the 
3.32 	taxpayer under the Internal Revenue Code for the taxable year.
4.1 	(c) "Applicable amount" means $100,000, or $50,000 for a married individual filing a 
4.2 	separate return. Each dollar amount is increased by an amount equal to: The commissioner 
4.3 	shall annually adjust these amounts as provided in section 270C.22. The amounts as adjusted 
4.4 	must be rounded to the nearest $50 amount. If the amount ends in $25, the amount is rounded 
4.5 	down to the nearest $50 amount. The amount for married individuals filing separate returns 
4.6 	must be one half of the adjusted amount for married individuals filing joint returns.
4.7 	(1) that dollar amount, multiplied by
4.8 	(2) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue 
4.9 	Code for the calendar year in which the taxable year begins, by substituting "calendar year 
4.10 	1990" for "calendar year 1992" in subparagraph (B) of section 1(f)(3).
4.11 	(d) "Itemized deductions" excludes:
4.12 	(1) the deduction for medical expenses under section 213 of the Internal Revenue Code;
4.13 	(2) any deduction for investment interest as defined in section 163(d) of the Internal 
4.14 	Revenue Code; and
4.15 	(3) the deduction under section 165(a) of the Internal Revenue Code for casualty or theft 
4.16 	losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue Code or 
4.17 	for losses described in section 165(d) of the Internal Revenue Code.

4.18 	EFFECTIVE DATE. This section is effective for adjustments beginning with taxable 
4.19 	years beginning after December 31, 2019.

4.20 	Sec. 4. Minnesota Statutes 2018, section 290.0131, subdivision 13, is amended to read:
4.21 		Subd. 13.Disallowed personal exemption amount. (a) The amount of disallowed 
4.22 	personal exemptions for taxpayers with federal adjusted gross income over the threshold 
4.23 	amount is an addition.
4.24 	(b) The disallowed personal exemption amount is equal to the number of personal 
4.25 	exemptions allowed under section 151(b) and (c) of the Internal Revenue Code multiplied 
4.26 	by the dollar amount for personal exemptions under section 151(d)(1) and (2) of the Internal 
4.27 	Revenue Code, as adjusted for inflation by section 151(d)(4) of the Internal Revenue Code, 
4.28 	and by the applicable percentage.
4.29 	(c) For a married individual filing a separate return, "applicable percentage" means two 
4.30 	percentage points for each $1,250, or fraction of that amount, by which the taxpayer's federal 
4.31 	adjusted gross income for the taxable year exceeds the threshold amount. For all other filers, 
4.32 	applicable percentage means two percentage points for each $2,500, or fraction of that 
5.1 	amount, by which the taxpayer's federal adjusted gross income for the taxable year exceeds 
5.2 	the threshold amount. The applicable percentage must not exceed 100 percent.
5.3 	(d) "Threshold amount" means:
5.4 	(1) $150,000 for a joint return or a surviving spouse;
5.5 	(2) $125,000 for a head of a household;
5.6 	(3) $100,000 for an individual who is not married and who is not a surviving spouse or 
5.7 	head of a household; and
5.8 	(4) $75,000 for a married individual filing a separate return.
5.9 	(e) The thresholds must be increased by an amount equal to: commissioner shall annually 
5.10 	adjust the amounts in paragraph (d) as provided in section 270C.22. The amounts as adjusted 
5.11 	must be rounded to the nearest $50 amount. If the amount ends in $25, the amount is rounded 
5.12 	down to the nearest $50 amount. The amount for married individuals filing separate returns 
5.13 	must be one half of the adjusted amount for married individuals filing joint returns.
5.14 	(1) the threshold dollar amount, multiplied by
5.15 	(2) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue 
5.16 	Code for the calendar year in which the taxable year begins, by substituting "calendar year 
5.17 	1990" for "calendar year 1992" in subparagraph (B) of section 1(f)(3).

5.18 	EFFECTIVE DATE. This section is effective for adjustments beginning with taxable 
5.19 	years beginning after December 31, 2019.

5.20 	Sec. 5. Minnesota Statutes 2018, section 290.0132, subdivision 26, is amended to read:
5.21 		Subd. 26.Social Security benefits. (a) A portion of Social Security benefits is allowed 
5.22 	as a subtraction. The subtraction equals the lesser of Social Security benefits or a maximum 
5.23 	subtraction subject to the limits under paragraphs (b), (c), and (d).
5.24 	(b) For married taxpayers filing a joint return and surviving spouses, the maximum 
5.25 	subtraction equals $4,500. The maximum subtraction is reduced by 20 percent of provisional 
5.26 	income over $77,000. In no case is the subtraction less than zero.
5.27 	(c) For single or head-of-household taxpayers, the maximum subtraction equals $3,500. 
5.28 	The maximum subtraction is reduced by 20 percent of provisional income over $60,200. 
5.29 	In no case is the subtraction less than zero.
6.1 	(d) For married taxpayers filing separate returns, the maximum subtraction equals $2,250. 
6.2 	The maximum subtraction is reduced by 20 percent of provisional income over $38,500. 
6.3 	In no case is the subtraction less than zero.
6.4 	(e) For purposes of this subdivision, "provisional income" means modified adjusted 
6.5 	gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of 
6.6 	the Social Security benefits received during the taxable year, and "Social Security benefits" 
6.7 	has the meaning given in section 86(d)(1) of the Internal Revenue Code.
6.8 	(f) The commissioner shall annually adjust the maximum subtraction and threshold
6.9 	amounts in paragraphs (b) to (d) by the percentage determined pursuant to the provisions 
6.10 	of section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) of the Internal 
6.11 	Revenue Code the word "2016" shall be substituted for the word "1992." For 2018, the 
6.12 	commissioner shall then determine the percentage change from the 12 months ending on 
6.13 	August 31, 2016, to the 12 months ending on August 31, 2017, and in each subsequent year, 
6.14 	from the 12 months ending on August 31, 2016, to the 12 months ending on August 31 of 
6.15 	the year preceding the taxable year. The determination of the commissioner pursuant to this 
6.16 	subdivision must not be considered a rule and is not subject to the Administrative Procedure 
6.17 	Act contained in chapter 14, including section 14.386. The maximum subtraction and 
6.18 	threshold amounts as adjusted must be rounded to the nearest $10 amount. If the amount 
6.19 	ends in $5, the amount is rounded up to the nearest $10 amount as provided in section 
6.20 	270C.22.

6.21 	EFFECTIVE DATE. This section is effective for adjustments beginning with taxable 
6.22 	years beginning after December 31, 2019.

6.23 	Sec. 6. Minnesota Statutes 2018, section 290.06, subdivision 2c, is amended to read:
6.24 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income taxes 
6.25 	imposed by this chapter upon married individuals filing joint returns and surviving spouses 
6.26 	as defined in section 2(a) of the Internal Revenue Code must be computed by applying to 
6.27 	their taxable net income the following schedule of rates:
6.28 	(1) On the first $35,480, 5.35 percent;
6.29 	(2) On all over $35,480, but not over $140,960, 7.05 percent;
6.30 	(3) On all over $140,960, but not over $250,000, 7.85 percent;
6.31 	(4) On all over $250,000, 9.85 percent.
7.1 	Married individuals filing separate returns, estates, and trusts must compute their income 
7.2 	tax by applying the above rates to their taxable income, except that the income brackets 
7.3 	will be one-half of the above amounts after the adjustment required in subdivision 2d.
7.4 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
7.5 	computed by applying to taxable net income the following schedule of rates:
7.6 	(1) On the first $24,270, 5.35 percent;
7.7 	(2) On all over $24,270, but not over $79,730, 7.05 percent;
7.8 	(3) On all over $79,730, but not over $150,000, 7.85 percent;
7.9 	(4) On all over $150,000, 9.85 percent.
7.10 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as 
7.11 	a head of household as defined in section 2(b) of the Internal Revenue Code must be 
7.12 	computed by applying to taxable net income the following schedule of rates:
7.13 	(1) On the first $29,880, 5.35 percent;
7.14 	(2) On all over $29,880, but not over $120,070, 7.05 percent;
7.15 	(3) On all over $120,070, but not over $200,000, 7.85 percent;
7.16 	(4) On all over $200,000, 9.85 percent.
7.17 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax 
7.18 	of any individual taxpayer whose taxable net income for the taxable year is less than an 
7.19 	amount determined by the commissioner must be computed in accordance with tables 
7.20 	prepared and issued by the commissioner of revenue based on income brackets of not more 
7.21 	than $100. The amount of tax for each bracket shall be computed at the rates set forth in 
7.22 	this subdivision, provided that the commissioner may disregard a fractional part of a dollar 
7.23 	unless it amounts to 50 cents or more, in which case it may be increased to $1.
7.24 	(e) An individual who is not a Minnesota resident for the entire year must compute the 
7.25 	individual's Minnesota income tax as provided in this subdivision. After the application of 
7.26 	the nonrefundable credits provided in this chapter, the tax liability must then be multiplied 
7.27 	by a fraction in which:
7.28 	(1) the numerator is the individual's Minnesota source federal adjusted gross income as 
7.29 	defined in section 62 of the Internal Revenue Code and increased by the additions required 
7.30 	under section 290.0131, subdivisions 2 and 6 to 11, and reduced by the Minnesota assignable 
7.31 	portion of the subtraction for United States government interest under section 290.0132, 
7.32 	subdivision 2, and the subtractions under section 290.0132, subdivisions 9, 10, 14, 15, 17, 
8.1 	and 18, after applying the allocation and assignability provisions of section 290.081, clause 
8.2 	(a), or 290.17; and
8.3 	(2) the denominator is the individual's federal adjusted gross income as defined in section 
8.4 	62 of the Internal Revenue Code, increased by the amounts specified in section 290.0131, 
8.5 	subdivisions 2 and 6 to 11, and reduced by the amounts specified in section 290.0132, 
8.6 	subdivisions 2, 9, 10, 14, 15, 17, and 18.

8.7 	EFFECTIVE DATE. This section is effective for adjustments beginning with taxable 
8.8 	years beginning after December 31, 2019.

8.9 	Sec. 7. Minnesota Statutes 2018, section 290.06, subdivision 2d, is amended to read:
8.10 		Subd. 2d.Inflation adjustment of brackets. (a) For taxable years beginning after 
8.11 	December 31, 2013, The commissioner shall annually adjust the minimum and maximum 
8.12 	dollar amounts for each rate bracket for which a tax is imposed in subdivision 2c shall be 
8.13 	adjusted for inflation by the percentage determined under paragraph (b). For the purpose 
8.14 	of making the adjustment as provided in this subdivision all of the rate brackets provided 
8.15 	in subdivision 2c shall be the rate brackets as they existed for taxable years beginning after 
8.16 	December 31, 2012, and before January 1, 2014 as provided in section 270C.22. The rate 
8.17 	applicable to any rate bracket must not be changed. The dollar amounts setting forth the tax 
8.18 	shall be adjusted to reflect the changes in the rate brackets. The rate brackets as adjusted 
8.19 	must be rounded to the nearest $10 amount. If the rate bracket ends in $5, it must be rounded 
8.20 	up to the nearest $10 amount. The commissioner must determine the rate brackets for married 
8.21 	individuals filing separate returns, estates, and trusts after rounding to the nearest $10 
8.22 	amount.
8.23 	(b) The commissioner shall adjust the rate brackets and by the percentage determined 
8.24 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 
8.25 	1(f)(3)(B) the word "2012" shall be substituted for the word "1992." For 2014, the 
8.26 	commissioner shall then determine the percent change from the 12 months ending on August 
8.27 	31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent year, from 
8.28 	the 12 months ending on August 31, 2012, to the 12 months ending on August 31 of the 
8.29 	year preceding the taxable year. The determination of the commissioner pursuant to this 
8.30 	subdivision shall not be considered a "rule" and shall not be subject to the Administrative 
8.31 	Procedure Act contained in chapter 14.
8.32 	No later than December 15 of each year, the commissioner shall announce the specific 
8.33 	percentage that will be used to adjust the tax rate brackets.

9.1 	EFFECTIVE DATE. This section is effective for adjustments beginning with taxable 
9.2 	years beginning after December 31, 2019.

9.3 	Sec. 8. Minnesota Statutes 2018, section 290.067, subdivision 2b, is amended to read:
9.4 		Subd. 2b.Inflation adjustment. The commissioner shall annually adjust the dollar 
9.5 	amount of the income threshold at which the maximum credit begins to be reduced under 
9.6 	subdivision 1 by the percentage determined pursuant to the provisions of section 1(f) of the 
9.7 	Internal Revenue Code, except that in section 1(f)(3)(B) the word "2016" shall be substituted 
9.8 	for the word "1992." For 2018, the commissioner shall then determine the percent change 
9.9 	from the 12 months ending on August 31, 2016, to the 12 months ending on August 31, 
9.10 	2017, and in each subsequent year, from the 12 months ending on August 31, 2016, to the 
9.11 	12 months ending on August 31 of the year preceding the taxable year. The determination 
9.12 	of the commissioner pursuant to this subdivision must not be considered a "rule" and is not 
9.13 	subject to the Administrative Procedure Act contained in chapter 14. The threshold amount 
9.14 	as adjusted must be rounded to the nearest $10 amount. If the amount ends in $5, the amount 
9.15 	is rounded up to the nearest $10 amount as provided in section 270C.22.

9.16 	EFFECTIVE DATE. This section is effective for adjustments beginning with taxable 
9.17 	years beginning after December 31, 2019.

9.18 	Sec. 9. Minnesota Statutes 2018, section 290.0671, subdivision 1, is amended to read:
9.19 		Subdivision 1.Credit allowed. (a) An individual who is a resident of Minnesota is 
9.20 	allowed a credit against the tax imposed by this chapter equal to a percentage of earned 
9.21 	income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the 
9.22 	Internal Revenue Code, except that a taxpayer with no qualifying children who has attained 
9.23 	the age of 21, but not attained age 65 before the close of the taxable year and is otherwise 
9.24 	eligible for a credit under section 32 of the Internal Revenue Code may also receive a credit.
9.25 	(b) For individuals with no qualifying children, the credit equals 2.10 percent of the first 
9.26 	$6,180 $6,640 of earned income. The credit is reduced by 2.01 percent of earned income 
9.27 	or adjusted gross income, whichever is greater, in excess of $8,130 the phase-out threshold, 
9.28 	but in no case is the credit less than zero.
9.29 	(c) For individuals with one qualifying child, the credit equals 9.35 percent of the first 
9.30 	$11,120$11,950 of earned income. The credit is reduced by 6.02 percent of earned income 
9.31 	or adjusted gross income, whichever is greater, in excess of $21,190 the phase-out threshold, 
9.32 	but in no case is the credit less than zero.
10.1 	(d) For individuals with two or more qualifying children, the credit equals 11 percent 
10.2 	of the first $18,240 $19,600 of earned income. The credit is reduced by 10.82 percent of 
10.3 	earned income or adjusted gross income, whichever is greater, in excess of $25,130 the 
10.4 	phase-out threshold, but in no case is the credit less than zero.
10.5 	(e) For a part-year resident, the credit must be allocated based on the percentage calculated 
10.6 	under section 290.06, subdivision 2c, paragraph (e).
10.7 	(f) For a person who was a resident for the entire tax year and has earned income not 
10.8 	subject to tax under this chapter, including income excluded under section 290.0132, 
10.9 	subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross 
10.10 	income reduced by the earned income not subject to tax under this chapter over federal 
10.11 	adjusted gross income. For purposes of this paragraph, the following clauses are not 
10.12 	considered "earned income not subject to tax under this chapter":
10.13 	(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;
10.14 	(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and
10.15 	(3) income derived from an Indian reservation by an enrolled member of the reservation 
10.16 	while living on the reservation.
10.17 	(g) For tax years beginning after December 31, 2013, the $8,130 in paragraph (b), the 
10.18 	$21,190 in paragraph (c), and the $25,130 in paragraph (d), after being adjusted for inflation 
10.19 	under subdivision 7, are each increased by $5,000 for married taxpayers filing joint returns. 
10.20 	For tax years beginning after December 31, 2013, the commissioner shall annually adjust 
10.21 	the $5,000 by the percentage determined pursuant to the provisions of section 1(f) of the 
10.22 	Internal Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted 
10.23 	for the word "1992." For 2014, the commissioner shall then determine the percent change 
10.24 	from the 12 months ending on August 31, 2008, to the 12 months ending on August 31, 
10.25 	2013, and in each subsequent year, from the 12 months ending on August 31, 2008, to the 
10.26 	12 months ending on August 31 of the year preceding the taxable year. The earned income 
10.27 	thresholds as adjusted for inflation must be rounded to the nearest $10. If the amount ends 
10.28 	in $5, the amount is rounded up to the nearest $10. The determination of the commissioner 
10.29 	under this subdivision is not a rule under the Administrative Procedure Act. For the purposes 
10.30 	of this section, the phase-out threshold equals:
10.31 	(1) for married taxpayers filing joint returns with no qualifying children, $14,570;
10.32 	(2) for all other taxpayers with no qualifying children, $8,730;
10.33 	(3) for married taxpayers filing joint returns with one qualifying child, $28,610;
11.1 	(4) for all other taxpayers with one qualifying child, $22,770;
11.2 	(5) for married taxpayers filing joint returns with two or more qualifying children, 
11.3 	$32,840; and
11.4 	(6) for all other taxpayers  with two or more qualifying children, $27,000.
11.5 	(h) The commissioner shall construct tables showing the amount of the credit at various 
11.6 	income levels and make them available to taxpayers. The tables shall follow the schedule 
11.7 	contained in this subdivision, except that the commissioner may graduate the transition 
11.8 	between income brackets.

11.9 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
11.10 	31, 2019.

11.11 	Sec. 10. Minnesota Statutes 2018, section 290.0671, subdivision 7, is amended to read:
11.12 		Subd. 7.Inflation adjustment. The commissioner shall annually adjust the earned 
11.13 	income amounts used to calculate the credit and the income phase-out thresholds at which 
11.14 	the maximum credit begins to be reduced in subdivision 1 must be adjusted for inflation. 
11.15 	The commissioner shall adjust by the percentage determined pursuant to the provisions of 
11.16 	section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) the word "2013" 
11.17 	shall be substituted for the word "1992." For 2015, the commissioner shall then determine 
11.18 	the percent change from the 12 months ending on August 31, 2013, to the 12 months ending 
11.19 	on August 31, 2014, and in each subsequent year, from the 12 months ending on August 
11.20 	31, 2013, to the 12 months ending on August 31 of the year preceding the taxable year. The 
11.21 	earned income thresholds as adjusted for inflation must be rounded to the nearest $10 
11.22 	amount. If the amount ends in $5, the amount is rounded up to the nearest $10 amount. The 
11.23 	determination of the commissioner under this subdivision is not a rule under the 
11.24 	Administrative Procedure Act., as provided in section 270C.22.

11.25 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
11.26 	31, 2019.

11.27 	Sec. 11. Minnesota Statutes 2018, section 290.0684, subdivision 2, is amended to read:
11.28 		Subd. 2.Credit allowed. (a) An individual who is a resident of Minnesota is allowed a 
11.29 	credit against the tax imposed by this chapter. The credit is not allowed to an individual 
11.30 	who is eligible to be claimed as a dependent, as defined in sections 151 and 152 of the 
11.31 	Internal Revenue Code. The credit may not exceed the liability for tax under this chapter.
12.1 	(b) The amount of the credit allowed equals 50 percent of contributions for the taxable 
12.2 	year. The maximum credit is $500, subject to the phaseout in paragraphs (c) and (d). In no 
12.3 	case is the credit less than zero.
12.4 	(c) For individual filers, the maximum credit is reduced by two percent of adjusted gross 
12.5 	income in excess of $75,000.
12.6 	(d) For married couples filing a joint return, the maximum credit is phased out as follows:
12.7 	(1) for married couples with adjusted gross income in excess of $75,000, but not more 
12.8 	than $100,000, the maximum credit is reduced by one percent of adjusted gross income in 
12.9 	excess of $75,000;
12.10 	(2) for married couples with adjusted gross income in excess of $100,000, but not more 
12.11 	than $135,000, the maximum credit is $250; and
12.12 	(3) for married couples with adjusted gross income in excess of $135,000, the maximum 
12.13 	credit is $250, reduced by one percent of adjusted gross income in excess of $135,000.
12.14 	(e) The commissioner shall annually adjust the income thresholds in paragraphs (c) and 
12.15 	(d) used to calculate the maximum credit must be adjusted for inflation. The commissioner 
12.16 	shall adjust the income thresholds by the percentage determined under the provisions of 
12.17 	section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) the word "2016" 
12.18 	is substituted for the word "1992." For 2018, the commissioner shall then determine the 
12.19 	percent change from the 12 months ending on August 31, 2016, to the 12 months ending 
12.20 	on August 31, 2017, and in each subsequent year, from the 12 months ending on August 
12.21 	31, 2016, to the 12 months ending on August 31 of the year preceding the taxable year. The 
12.22 	income thresholds as adjusted for inflation must be rounded to the nearest $10 amount. If 
12.23 	the amount ends in $5, the amount is rounded up to the nearest $10 amount. The 
12.24 	determination of the commissioner under this subdivision is not subject to chapter 14, 
12.25 	including section 14.386 as provided in section 270C.22.

12.26 	EFFECTIVE DATE. This section is effective for adjustments beginning with taxable 
12.27 	years beginning after December 31, 2019.

12.28 	Sec. 12. Minnesota Statutes 2018, section 290.091, subdivision 3, is amended to read:
12.29 		Subd. 3.Exemption amount. (a) For purposes of computing the alternative minimum 
12.30 	tax, the exemption amount is, for taxable years beginning after December 31, 2005, $60,000 
12.31 	for married couples filing joint returns, $30,000 for married individuals filing separate 
12.32 	returns, estates, and trusts, and $45,000 for unmarried individuals.
13.1 	(b) The exemption amount determined under this subdivision is subject to the phase out 
13.2 	under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum 
13.3 	taxable income as determined under this section must be substituted in the computation of 
13.4 	the phase out.
13.5 	(c) For taxable years beginning after December 31, 2006, The commissioner shall 
13.6 	annually adjust the exemption amount under amounts in paragraph (a) must be adjusted for 
13.7 	inflation. The commissioner shall adjust the exemption amount by the percentage determined 
13.8 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 
13.9 	1(f)(3)(B) the word "2005" shall be substituted for the word "1992." For 2007, the 
13.10 	commissioner shall then determine the percent change from the 12 months ending on August 
13.11 	31, 2005, to the 12 months ending on August 31, 2006, and in each subsequent year, from 
13.12 	the 12 months ending on August 31, 2005, to the 12 months ending on August 31 of the 
13.13 	year preceding the taxable year. The exemption amount as adjusted must be rounded to the 
13.14 	nearest $10. If the amount ends in $5, it must be rounded up to the nearest $10 amount. The 
13.15 	determination of the commissioner under this subdivision is not a rule under the 
13.16 	Administrative Procedure Act as provided in section 270C.22.

13.17 	EFFECTIVE DATE. This section is effective for adjustments beginning with taxable 
13.18 	years beginning after December 31, 2019.

13.19 	Sec. 13. Minnesota Statutes 2018, section 290.0922, subdivision 1, is amended to read:
13.20 		Subdivision 1.Imposition. (a) In addition to the tax imposed by this chapter without 
13.21 	regard to this section, the franchise tax imposed on a corporation required to file under 
13.22 	section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation under 
13.23 	section 290.9725 for the taxable year includes a tax equal to the following amounts:

13.24
13.25	If the sum of the corporation's Minnesota 
property, payrolls, and sales or receipts is:
		the tax equals:
	
13.26			less than
		$
	930,000
		$
	0
		
13.27		$
	930,000
	to
	$
	1,869,999
		$
	190
		
13.28		$
	1,870,000
	to
	$
	9,339,999
		$
	560
		
13.29		$
	9,340,000
	to
	$
	18,679,999
		$
	1,870
		
13.30		$
	18,680,000
	to
	$
	37,359,999
		$
	3,740
		
13.31		$
	37,360,000
	or
	more
			$
	9,340
		
13.32 	(b) A tax is imposed for each taxable year on a corporation required to file a return under 
13.33 	section 289A.12, subdivision 3, that is treated as an "S" corporation under section 290.9725
13.34 	and on a partnership required to file a return under section 289A.12, subdivision 3, other 
14.1 	than a partnership that derives over 80 percent of its income from farming. The tax imposed 
14.2 	under this paragraph is due on or before the due date of the return for the taxpayer due under 
14.3 	section 289A.18, subdivision 1. The commissioner shall prescribe the return to be used for 
14.4 	payment of this tax. The tax under this paragraph is equal to the following amounts:

14.5
14.6
14.7
14.8	If the sum of the S corporation's 
or partnership's Minnesota 
property, payrolls, and sales or 
receipts is:
			the tax equals:
	
14.9			less than
		$
	930,000
		$
	0
		
14.10		$
	930,000
	to
	$
	1,869,999
		$
	190
		
14.11		$
	1,870,000
	to
	$
	9,339,999
		$
	560
		
14.12		$
	9,340,000
	to
	$
	18,679,999
		$
	1,870
		
14.13		$
	18,680,000
	to
	$
	37,359,999
		$
	3,740
		
14.14		$
	37,360,000
	or
	more
			$
	9,340
		
14.15 	(c) The commissioner shall annually adjust the dollar amounts of both the tax and the 
14.16 	property, payrolls, and sales or receipts thresholds in paragraphs (a) and (b) by the percentage 
14.17 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except 
14.18 	that in section 1(f)(3)(B) the word "2012" must be substituted for the word "1992." For 
14.19 	2014, the commissioner shall determine the percentage change from the 12 months ending 
14.20 	on August 31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent 
14.21 	year, from the 12 months ending on August 31, 2012, to the 12 months ending on August 
14.22 	31 of the year preceding the taxable year. The determination of the commissioner pursuant 
14.23 	to this subdivision is not a "rule" subject to the Administrative Procedure Act contained in 
14.24 	chapter 14 as provided in section 270C.22. The tax amounts as adjusted must be rounded 
14.25 	to the nearest $10 amount and the threshold amounts must be adjusted to the nearest $10,000 
14.26 	amount. For tax amounts that end in $5, the amount is rounded up to the nearest $10 amount 
14.27 	and for the threshold amounts that end in $5,000, the amount is rounded up to the nearest 
14.28 	$10,000.

14.29 	EFFECTIVE DATE. This section is effective for adjustments beginning with taxable 
14.30 	years beginning after December 31, 2019.

14.31 	Sec. 14. Minnesota Statutes 2018, section 290A.03, subdivision 12, is amended to read:
14.32 		Subd. 12.Gross rent. (a) "Gross rent" means rental paid for the right of occupancy, at 
14.33 	arm's length, of a homestead, exclusive of charges for any medical services furnished by 
14.34 	the landlord as a part of the rental agreement, whether expressly set out in the rental 
14.35 	agreement or not.
15.1 	(b) The gross rent of a resident of a nursing home or intermediate care facility is $350 
15.2 	per month. The gross rent of a resident of an adult foster care home is $550 per month. 
15.3 	Beginning for rent paid in 2002, The commissioner shall annually adjust for inflation the 
15.4 	gross rent amounts stated in this paragraph as provided in section 270C.22. The adjustment 
15.5 	must be made in accordance with section 1(f) of the Internal Revenue Code, except that for 
15.6 	purposes of this paragraph the percentage increase shall be determined from the year ending 
15.7 	on June 30, 2001, to the year ending on June 30 of the year in which the rent is paid. The 
15.8 	commissioner shall round the gross rents to the nearest $10 amount. If the amount ends in 
15.9 	$5, the commissioner shall round it up to the next $10 amount. The determination of the 
15.10 	commissioner under this paragraph is not a rule under the Administrative Procedure Act.
15.11 	(c) If the landlord and tenant have not dealt with each other at arm's length and the 
15.12 	commissioner determines that the gross rent charged was excessive, the commissioner may 
15.13 	adjust the gross rent to a reasonable amount for purposes of this chapter.
15.14 	(d) Any amount paid by a claimant residing in property assessed pursuant to section 
15.15 	273.124, subdivision 3, 4, 5, or 6 for occupancy in that property shall be excluded from 
15.16 	gross rent for purposes of this chapter. However, property taxes imputed to the homestead 
15.17 	of the claimant or the dwelling unit occupied by the claimant that qualifies for homestead 
15.18 	treatment pursuant to section 273.124, subdivision 3, 4, 5, or 6 shall be included within the 
15.19 	term "property taxes payable" as defined in subdivision 13, notwithstanding the fact that 
15.20 	ownership is not in the name of the claimant.

15.21 	EFFECTIVE DATE. This section is effective for adjustments for refunds payable 
15.22 	beginning in 2020.

15.23 	Sec. 15. Minnesota Statutes 2018, section 290A.04, subdivision 4, is amended to read:
15.24 		Subd. 4.Inflation adjustment. (a) Beginning for property tax refunds payable in calendar 
15.25 	year 2002, The commissioner shall annually adjust the dollar amounts of the income 
15.26 	thresholds and the maximum refunds under subdivisions 2 and 2a for inflation as provided 
15.27 	in section 270C.22. The commissioner shall make the inflation adjustments in accordance 
15.28 	with section 1(f) of the Internal Revenue Code, except that for purposes of this subdivision 
15.29 	the percentage increase shall be determined as provided in this subdivision.
15.30 	(b) In adjusting the dollar amounts of the income thresholds and the maximum refunds 
15.31 	under subdivision 2 for inflation, the percentage increase shall be determined from the year 
15.32 	ending on June 30, 2013, to the year ending on June 30 of the year preceding that in which 
15.33 	the refund is payable.
16.1 	(c) In adjusting the dollar amounts of the income thresholds and the maximum refunds 
16.2 	under subdivision 2a for inflation, the percentage increase shall be determined from the 
16.3 	year ending on June 30, 2013, to the year ending on June 30 of the year preceding that in 
16.4 	which the refund is payable.
16.5 	(d) The commissioner shall use the appropriate percentage increase to annually adjust 
16.6 	the income thresholds and maximum refunds under subdivisions 2 and 2a for inflation 
16.7 	without regard to whether or not the income tax brackets are adjusted for inflation in that 
16.8 	year. The commissioner shall round the thresholds and the maximum amounts, as adjusted 
16.9 	to the nearest $10 amount. If the amount ends in $5, the commissioner shall round it up to 
16.10 	the next $10 amount.
16.11 	(e)The commissioner shall annually announce the adjusted refund schedule at the same 
16.12 	time provided under section 290.06. The determination of the commissioner under this 
16.13 	subdivision is not a rule under the Administrative Procedure Act.

16.14 	EFFECTIVE DATE. This section is effective for adjustments for refunds payable 
16.15 	beginning in 2020.

16.16 	Sec. 16. REVISOR INSTRUCTION.
 16.17 	The commissioner of revenue must promptly notify the revisor of statutes in writing of 
16.18 	the adjusted amounts announced and published by the commissioner under section 2 for 
16.19 	2019 for each of the affected statutory sections. The revisor shall publish the updated 2019 
16.20 	amounts in the 2019 Supplement of Minnesota Statutes.