1.1 	A bill for an act
1.2 	relating to taxation; individual income and property tax refunds; allowing a 
1.3 	subtraction for all federally taxable Social Security income; reducing the first tier 
1.4 	income tax rate; increasing homestead credit state refunds;amending Minnesota 
1.5 	Statutes 2022, sections 290.0132, subdivision 26; 290.06, subdivisions 2c, 2d; 
1.6 	290A.04, subdivisions 2, 4.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2022, section 290.0132, subdivision 26, is amended to read:
1.9 		Subd. 26.Social Security benefits. (a) A portion The amount of taxable Social Security 
1.10 	benefits received by a taxpayer in the taxable year is allowed as a subtraction. The subtraction 
1.11 	equals the lesser of taxable Social Security benefits or a maximum subtraction subject to 
1.12 	the limits under paragraphs (b), (c), and (d).
1.13 	(b) For married taxpayers filing a joint return and surviving spouses, the maximum 
1.14 	subtraction equals $5,150. The maximum subtraction is reduced by 20 percent of provisional 
1.15 	income over $78,180. In no case is the subtraction less than zero.
1.16 	(c) For single or head-of-household taxpayers, the maximum subtraction equals $4,020. 
1.17 	The maximum subtraction is reduced by 20 percent of provisional income over $61,080. 
1.18 	In no case is the subtraction less than zero.
1.19 	(d) For married taxpayers filing separate returns, the maximum subtraction equals 
1.20 	one-half the maximum subtraction for joint returns under paragraph (b). The maximum 
1.21 	subtraction is reduced by 20 percent of provisional income over one-half the threshold 
1.22 	amount specified in paragraph (b). In no case is the subtraction less than zero.
2.1 	(e) For purposes of this subdivision, "provisional income" means modified adjusted 
2.2 	gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of 
2.3 	the taxable Social Security benefits received during the taxable year, and "Social Security 
2.4 	benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.
2.5 	(f) The commissioner shall adjust the maximum subtraction and threshold amounts in 
2.6 	paragraphs (b) to (d) as provided in section 270C.22. The statutory year is taxable year 
2.7 	2019. The maximum subtraction and threshold amounts as adjusted must be rounded to the 
2.8 	nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10 
2.9 	amount.

2.10 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
2.11 	31, 2022.

2.12 	Sec. 2. Minnesota Statutes 2022, section 290.06, subdivision 2c, is amended to read:
2.13 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income taxes 
2.14 	imposed by this chapter upon married individuals filing joint returns and surviving spouses 
2.15 	as defined in section 2(a) of the Internal Revenue Code must be computed by applying to 
2.16 	their taxable net income the following schedule of rates:
2.17 	(1) On the first $38,770 $43,950, 5.35 2.8 percent;
2.18 	(2) On all over $38,770 $43,950, but not over $154,020 $174,610, 6.8 percent;
2.19 	(3) On all over $154,020 $174,610, but not over $269,010 $304,970, 7.85 percent;
2.20 	(4) On all over $269,010 $304,970, 9.85 percent.
2.21 	Married individuals filing separate returns, estates, and trusts must compute their income 
2.22 	tax by applying the above rates to their taxable income, except that the income brackets 
2.23 	will be one-half of the above amounts after the adjustment required in subdivision 2d.
2.24 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
2.25 	computed by applying to taxable net income the following schedule of rates:
2.26 	(1) On the first $26,520 $30,070, 5.35 2.8 percent;
2.27 	(2) On all over $26,520 $30,070, but not over $87,110 $98,760, 6.8 percent;
2.28 	(3) On all over $87,110 $98,760, but not over $161,720 $183,340, 7.85 percent;
2.29 	(4) On all over $161,720 $183,340, 9.85 percent.
3.1 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as 
3.2 	a head of household as defined in section 2(b) of the Internal Revenue Code must be 
3.3 	computed by applying to taxable net income the following schedule of rates:
3.4 	(1) On the first $32,650 $37,010, 5.35 2.8 percent;
3.5 	(2) On all over $32,650 $37,010, but not over $131,190 $148,730, 6.8 percent;
3.6 	(3) On all over $131,190 $148,730, but not over $214,980 $243,720, 7.85 percent;
3.7 	(4) On all over $214,980 $243,720, 9.85 percent.
3.8 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax 
3.9 	of any individual taxpayer whose taxable net income for the taxable year is less than an 
3.10 	amount determined by the commissioner must be computed in accordance with tables 
3.11 	prepared and issued by the commissioner of revenue based on income brackets of not more 
3.12 	than $100. The amount of tax for each bracket shall be computed at the rates set forth in 
3.13 	this subdivision, provided that the commissioner may disregard a fractional part of a dollar 
3.14 	unless it amounts to 50 cents or more, in which case it may be increased to $1.
3.15 	(e) An individual who is not a Minnesota resident for the entire year must compute the 
3.16 	individual's Minnesota income tax as provided in this subdivision. After the application of 
3.17 	the nonrefundable credits provided in this chapter, the tax liability must then be multiplied 
3.18 	by a fraction in which:
3.19 	(1) the numerator is the individual's Minnesota source federal adjusted gross income as 
3.20 	defined in section 62 of the Internal Revenue Code and increased by:
3.21 	(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and 
3.22 	17, and 290.0137, paragraph (a); and reduced by
3.23 	(ii) the Minnesota assignable portion of the subtraction for United States government 
3.24 	interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132, 
3.25 	subdivisions 9, 10, 14, 15, 17, 18, and 27, and 290.0137, paragraph (c), after applying the 
3.26 	allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
3.27 	(2) the denominator is the individual's federal adjusted gross income as defined in section 
3.28 	62 of the Internal Revenue Code, increased by:
3.29 	(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and 
3.30 	17, and 290.0137, paragraph (a); and reduced by
3.31 	(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, and 
3.32 	27, and 290.0137, paragraph (c).
4.1 	(f) If an individual who is not a Minnesota resident for the entire year is a qualifying 
4.2 	owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision 
4.3 	7a, paragraph (b), the individual must compute the individual's Minnesota income tax as 
4.4 	provided in paragraph (e), and also must include, to the extent attributed to the electing 
4.5 	qualifying entity:
4.6 	(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the 
4.7 	addition under section 290.0131, subdivision 5; and
4.8 	(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the 
4.9 	subtraction under section 290.0132, subdivision 3.

4.10 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
4.11 	31, 2022.

4.12 	Sec. 3. Minnesota Statutes 2022, section 290.06, subdivision 2d, is amended to read:
4.13 		Subd. 2d.Inflation adjustment of brackets. The commissioner shall annually adjust 
4.14 	the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed 
4.15 	in subdivision 2c as provided in section 270C.22. The statutory year is taxable year 2019
4.16 	2023. The rate applicable to any rate bracket must not be changed. The dollar amounts 
4.17 	setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate 
4.18 	brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in 
4.19 	$5, it must be rounded up to the nearest $10 amount. The commissioner shall determine the 
4.20 	rate bracket for married filing separate returns after this adjustment is done. The rate bracket 
4.21 	for married filing separate must be one-half of the rate bracket for married filing joint.

4.22 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
4.23 	31, 2023.

4.24 	Sec. 4. Minnesota Statutes 2022, section 290A.04, subdivision 2, is amended to read:
4.25 		Subd. 2.Homeowners; homestead credit refund. A claimant whose property taxes 
4.26 	payable are in excess of the percentage of the household income stated below shall pay an 
4.27 	amount equal to the percent of income shown for the appropriate household income level 
4.28 	along with the percent to be paid by the claimant of the remaining amount of property taxes 
4.29 	payable. The state refund equals the amount of property taxes payable that remain, up to 
4.30 	the state refund amount shown below.

5.35.2
5.1
	Household Income
	Percent of Income
	Percent Paid by
Claimant
	Maximum 
State
Refund
	
5.4
5.5	$0 to 1,739
2,090
	1.0 percent
	15
10 percent
	$
	2,770
3,830
	
5.6
5.7	1,740 to 3,459
2,091 to 4,160
	1.1 percent
	15
10 percent
	$
	2,770
3,830
	
5.8
5.9	3,460 to 5,239
4,161 to 6,300
	1.2 percent
	15
10 percent
	$
	2,770
3,830
	
5.10
5.11	5,240 to 6,989
6,301 to 8,400
	1.3 percent
	20
15 percent
	$
	2,770
3,830
	
5.12
5.13	6,990 to 8,719
8,401 to 10,480
	1.4 percent
	20
15 percent
	$
	2,770
3,830
	
5.14
5.15	8,720 to 12,219
10,481 to 14,680
	1.5 percent
	20
15 percent
	$
	2,770
3,830
	
5.16
5.17	12,220 to 13,949
14,681 to 16,760
	1.6 percent
	20
15 percent
	$
	2,770
3,830
	
5.18
5.19	13,950 to 15,709
16,761 to 18,880
	1.7 percent
	20
15 percent
	$
	2,770
3,830
	
5.20
5.21	15,710 to 17,449
18,881 to 20,970
	1.8 percent
	20
15 percent
	$
	2,770
3,830
	
5.22
5.23	17,450 to 19,179
20,971 to 23,040
	1.9 percent
	25
20 percent
	$
	2,770
3,830
	
5.24
5.25	19,180 to 24,429
23,041 to 29,350
	2.0 percent
	25
20 percent
	$
	2,770
3,830
	
5.26
5.27	24,430 to 26,169
29,351 to 31,440
	2.0 percent
	30
25 percent
	$
	2,770
3,830
	
5.28
5.29	26,170 to 29,669
31,441 to 35,650
	2.0 percent
	30
25 percent
	$
	2,770
3,830
	
5.30
5.31	29,670 to 41,859
35,651 to 50,290
	2.0 percent
	35
30 percent
	$
	2,770
3,830
	
5.32
5.33	41,860 to 61,049
50,291 to 73,350
	2.0 percent
	35
30 percent
	$
	2,240
3,190
	
5.34
5.35	61,050 to 69,769
73,351 to 83,830
	2.0 percent
	40
35 percent
	$
	1,960
2,850
	
5.36
5.37	69,770 to 78,499
83,831 to 94,320
	2.1 percent
	40
35 percent
	$
	1,620
2,450
	
5.38
5.39	78,500 to 87,219
94,321 to 104,790
	2.2 percent
	40
35 percent
	$
	1,450
2,240
	
5.40
5.41	87,220 to 95,939
104,791 to 115,270
	2.3 percent
	40
35 percent
	$
	1,270
2,030
	
5.42
5.43	95,940 to 101,179
115,271 to 121,570
	2.4 percent
	45
40 percent
	$
	1,070
1,790
	
5.44
5.45	101,180 to 104,689
121,571 to 125,780
	2.5 percent
	45
40 percent
	$
	890
1,570
	
6.1
6.2	104,690 to 108,919
125,781 to 130,870
	2.5 percent
	50
45 percent
	$
	730
1,380
	
6.3
6.4	108,920 to 113,149
130,871 to 135,950
	2.5 percent
	50
45 percent
	$
	540
1,150
	
6.5	135,951 to 145,000
	2.5 percent
	50 percent
	$
	750
	
6.6	145,001 to 155,000
	2.5 percent
	50 percent
	$
	250
	
6.7 	The payment made to a claimant shall be the amount of the state refund calculated under 
6.8 	this subdivision. No payment is allowed if the claimant's household income is $113,150
6.9 	$155,001 or more.

6.10 	EFFECTIVE DATE. This section is effective beginning with refunds based on property 
6.11 	taxes payable in 2024.

6.12 	Sec. 5. Minnesota Statutes 2022, section 290A.04, subdivision 4, is amended to read:
6.13 		Subd. 4.Inflation adjustment.  The commissioner shall annually adjust the dollar 
6.14 	amounts of the income thresholds and the maximum refunds under subdivisions 2 and 2a 
6.15 	as provided in section 270C.22. The statutory year for the renter's credit under subdivision 
6.16 	2a is 2018. The statutory year for the homestead credit refund is 2023.