Office of the Revisor of Statutes
HF 167
Introduction - 94th Legislature (2025 - 2026)
Posted on 02/10/2025 03:08 p.m.
Bill Text Versions
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Introduction
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Posted on 02/10/2025 |
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A bill for an act
relating to taxation; individual income and property tax refunds; allowing an
unlimited Social Security subtraction; modifying individual income tax rates;
modifying property tax refunds; amending Minnesota Statutes 2024, sections
290.0132, subdivision 26; 290.06, subdivisions 2c, 2d; 290A.04, subdivisions 2,
4.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, section 290.0132, subdivision 26, is amended to read:
Subd. 26.
Social Security benefits.
deleted text begin
(a) A taxpayer is allowed a subtraction equal to the
greater of the simplified subtraction allowed under paragraph (b) or the alternate subtraction
determined under paragraph (e).
deleted text end
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(b) A taxpayer's simplified subtraction equals the amount of taxable social security
benefits, as reduced under paragraphs (c) and (d).
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(c) For a taxpayer other than a married taxpayer filing a separate return with adjusted
gross income above the phaseout threshold, the simplified subtraction is reduced by ten
percent for each $4,000 of adjusted gross income, or fraction thereof, in excess of the
phaseout threshold. The phaseout threshold equals:
deleted text end
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(1) $100,000 for a married taxpayer filing a joint return or surviving spouse;
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(2) $78,000 for a single or head of household taxpayer; and
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(3) for a married taxpayer filing a separate return, half the amount for a married taxpayer
filing a joint return.
deleted text end
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(d) For a married taxpayer filing a separate return, the simplified subtraction is reduced
by ten percent for each $2,000 of adjusted gross income, or fraction thereof, in excess of
the phaseout threshold.
deleted text end
deleted text begin
(e) A taxpayer's alternate subtraction equals the lesser of taxable Social Security benefits
or a maximum subtraction subject to the limits under paragraphs (f), (g), and (h).
deleted text end
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(f) For married taxpayers filing a joint return and surviving spouses, the maximum
subtraction under paragraph (c) equals $5,840. The maximum subtraction is reduced by 20
percent of provisional income over $88,630. In no case is the subtraction less than zero.
deleted text end
deleted text begin
(g) For single or head-of-household taxpayers, the maximum subtraction under paragraph
(c) equals $4,560. The maximum subtraction is reduced by 20 percent of provisional income
over $69,250. In no case is the subtraction less than zero.
deleted text end
deleted text begin
(h) For married taxpayers filing separate returns, the maximum subtraction under
paragraph (c) equals one-half the maximum subtraction for joint returns under paragraph
(f). The maximum subtraction is reduced by 20 percent of provisional income over one-half
the threshold amount specified in paragraph (d). In no case is the subtraction less than zero.
deleted text end
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(i) For purposes of this subdivision, "provisional income" means modified adjusted gross
income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of the
taxable Social Security benefits received during the taxable year, and "Social Security
benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.
deleted text end
deleted text begin
(j) The commissioner shall adjust the phaseout threshold amounts in paragraphs (c) and
(d) as provided in section 270C.22. The statutory year is taxable year 2023. 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.
deleted text end
new text begin
(a) The amount of Social Security benefits received is a subtraction.
new text end
new text begin
(b) "Social Security benefits" has the meaning given in section 86(d)(1) of the Internal
Revenue Code.
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, 2024.
new text end
Sec. 2.
Minnesota Statutes 2024, section 290.06, subdivision 2c, is amended to read:
Subd. 2c.
Schedules of rates for individuals, estates, and trusts.
(a) The income taxes
imposed by this chapter upon married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
their taxable net income the following schedule of rates:
(1) On the first deleted text begin $38,770deleted text end new text begin $47,620new text end , deleted text begin 5.35deleted text end new text begin 2.8new text end percent;
(2) On all over deleted text begin $38,770deleted text end new text begin $47,620new text end , but not over deleted text begin $154,020deleted text end new text begin $189,180new text end , 6.8 percent;
(3) On all over deleted text begin $154,020deleted text end new text begin $189,180new text end , but not over deleted text begin $269,010deleted text end new text begin $330,410new text end , 7.85 percent;
(4) On all over deleted text begin $269,010deleted text end new text begin $330,410new text end , 9.85 percent.
Married individuals filing separate returns, estates, and trusts must compute their income
tax by applying the above rates to their taxable income, except that the income brackets
will be one-half of the above amounts after the adjustment required in subdivision 2d.
(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:
(1) On the first deleted text begin $26,520deleted text end new text begin $47,620new text end , deleted text begin 5.35deleted text end new text begin 2.8new text end percent;
(2) On all over deleted text begin $26,520deleted text end new text begin $47,620new text end , but not over deleted text begin $87,110deleted text end new text begin $189,180new text end , 6.8 percent;
(3) On all over deleted text begin $87,110deleted text end new text begin $189,180new text end , but not over deleted text begin $161,720deleted text end new text begin $330,410new text end , 7.85 percent;
(4) On all over deleted text begin $161,720deleted text end new text begin $330,410new text end , 9.85 percent.
(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:
(1) On the first deleted text begin $32,650deleted text end new text begin $47,620new text end , deleted text begin 5.35deleted text end new text begin 2.1new text end percent;
(2) On all over deleted text begin $32,650deleted text end new text begin $47,620new text end , but not over deleted text begin $131,190deleted text end new text begin $189,180new text end , 6.8 percent;
(3) On all over deleted text begin $131,190deleted text end new text begin $189,180new text end , but not over deleted text begin $214,980deleted text end new text begin $330,410new text end , 7.85 percent;
(4) On all over deleted text begin $214,980deleted text end new text begin $330,410new text end , 9.85 percent.
(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
of any individual taxpayer whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not more
than $100. The amount of tax for each bracket shall be computed at the rates set forth in
this subdivision, provided that the commissioner may disregard a fractional part of a dollar
unless it amounts to 50 cents or more, in which case it may be increased to $1.
(e) An individual who is not a Minnesota resident for the entire year must compute the
individual's Minnesota income tax as provided in this subdivision. After the application of
the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
by a fraction in which:
(1) the numerator is the individual's Minnesota source federal adjusted gross income as
defined in section 62 of the Internal Revenue Code and increased by:
(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, 17, 19,
and 20, and 290.0137, paragraph (a); and reduced by
(ii) the Minnesota assignable portion of the subtraction for United States government
interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
subdivisions 9, 10, 14, 15, 17, 18, 27, 31, and 32, and 290.0137, paragraph (c), after applying
the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
(2) the denominator is the individual's federal adjusted gross income as defined in section
62 of the Internal Revenue Code, increased by:
(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, 17, 19,
and 20, and 290.0137, paragraph (a); and reduced by
(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, 27,
31, and 32, and 290.0137, paragraph (c).
(f) If an individual who is not a Minnesota resident for the entire year is a qualifying
owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
7a, paragraph (b), the individual must compute the individual's Minnesota income tax as
provided in paragraph (e), and also must include, to the extent attributed to the electing
qualifying entity:
(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
addition under section 290.0131, subdivision 5; and
(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
subtraction under section 290.0132, subdivision 3.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2024.
new text end
Sec. 3.
Minnesota Statutes 2024, section 290.06, subdivision 2d, is amended to read:
Subd. 2d.
Inflation adjustment of brackets.
The commissioner shall annually adjust
the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed
in subdivision 2c as provided in section 270C.22. The statutory year is taxable year deleted text begin 2019deleted text end new text begin
2025new text end . The rate applicable to any rate bracket must not be changed. The dollar amounts
setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate
brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in
$5, it must be rounded up to the nearest $10 amount. The commissioner shall determine the
rate bracket for married filing separate returns after this adjustment is done. The rate bracket
for married filing separate must be one-half of the rate bracket for married filing joint.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2025.
new text end
Sec. 4.
Minnesota Statutes 2024, section 290A.04, subdivision 2, is amended to read:
Subd. 2.
Homeowners; homestead credit refund.
A claimant whose property taxes
payable are in excess of the percentage of the household income stated below shall pay an
amount equal to the percent of income shown for the appropriate household income level
along with the percent to be paid by the claimant of the remaining amount of property taxes
payable. The state refund equals the amount of property taxes payable that remain, up to
the state refund amount shown below.
| Household Income |
Percent of Income |
Percent Paid by Claimant |
Maximum State Refund |
|
| $0 to deleted text begin 2,079deleted text end new text begin 2,139 new text end |
1.0 percent |
deleted text begin 12deleted text end new text begin 10new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
2,080 to 4,139
deleted text end
new text begin
2,140 to 4,259 new text end |
1.1 percent |
deleted text begin 12deleted text end new text begin 10new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
4,140 to 6,269
deleted text end
new text begin
4,260 to 6,449 new text end |
1.2 percent |
deleted text begin 12deleted text end new text begin 10new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
6,270 to 8,369
deleted text end
new text begin
6,450 to 8,609 new text end |
1.3 percent |
deleted text begin 17deleted text end new text begin 15new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
8,370 to 10,439
deleted text end
new text begin
8,610 to 10,739 new text end |
1.4 percent |
deleted text begin 17deleted text end new text begin 15new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
10,440 to 14,619
deleted text end
new text begin
10,740 to 15,039 new text end |
1.5 percent |
deleted text begin 17deleted text end new text begin 15new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
14,620 to 16,689
deleted text end
new text begin
15,040 to 17,169 new text end |
1.6 percent |
deleted text begin 17deleted text end new text begin 15new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
16,690 to 18,799
deleted text end
new text begin
17,170 to 19,339 new text end |
1.7 percent |
deleted text begin 17deleted text end new text begin 15new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
18,800 to 20,879
deleted text end
new text begin
19,340 to 21,479 new text end |
1.8 percent |
deleted text begin 17deleted text end new text begin 15new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
20,880 to 22,949
deleted text end
new text begin
21,480 to 23,609 new text end |
1.9 percent |
deleted text begin 22deleted text end new text begin 20new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
22,950 to 29,239
deleted text end
new text begin
23,610 to 30,079 new text end |
2.0 percent |
deleted text begin 22deleted text end new text begin 20new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
29,240 to 31,319
deleted text end
new text begin
30,080 to 32,219 new text end |
2.0 percent |
deleted text begin 27deleted text end new text begin 25new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
31,320 to 35,509
deleted text end
new text begin
32,220 to 36,529 new text end |
2.0 percent |
deleted text begin 27deleted text end new text begin 25new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
35,510 to 50,099
deleted text end
new text begin
36,530 to 51,549 new text end |
2.0 percent |
deleted text begin 32deleted text end new text begin 30new text end percent |
$ |
deleted text begin
3,310
deleted text end
new text begin
3,910 new text end |
|
deleted text begin
50,100 to 73,059
deleted text end
new text begin
51,550 to 75,169 new text end |
2.0 percent |
deleted text begin 32deleted text end new text begin 30new text end percent |
$ |
deleted text begin
2,680
deleted text end
new text begin
3,260 new text end |
|
deleted text begin
73,060 to 83,499
deleted text end
new text begin
75,170 to 85,909 new text end |
2.0 percent |
deleted text begin 37deleted text end new text begin 35new text end percent |
$ |
deleted text begin
2,350
deleted text end
new text begin
2,920 new text end |
|
deleted text begin
83,500 to 93,939
deleted text end
new text begin
85,910 to 96,649 new text end |
2.1 percent |
deleted text begin 37deleted text end new text begin 35new text end percent |
$ |
deleted text begin
1,940
deleted text end
new text begin
2,500 new text end |
|
deleted text begin
93,940 to 104,379
deleted text end
new text begin
96,650 to 107,389 new text end |
2.2 percent |
deleted text begin 37deleted text end new text begin 35new text end percent |
$ |
deleted text begin
1,740
deleted text end
new text begin
2,290 new text end |
|
deleted text begin
104,380 to 114,819
deleted text end
new text begin
107,390 to 118,129 new text end |
2.3 percent |
deleted text begin 37deleted text end new text begin 35new text end percent |
$ |
deleted text begin
1,520
deleted text end
new text begin
2,060 new text end |
|
deleted text begin
114,820 to 121,089
deleted text end
new text begin
118,130 to 124,579 new text end |
2.4 percent |
deleted text begin 42deleted text end new text begin 40new text end percent |
$ |
deleted text begin
1,280
deleted text end
new text begin
1,820 new text end |
|
deleted text begin
121,090 to 125,289
deleted text end
new text begin
124,580 to 128,909 new text end |
2.5 percent |
deleted text begin 42deleted text end new text begin 40new text end percent |
$ |
deleted text begin
1,070
deleted text end
new text begin
1,600 new text end |
|
deleted text begin
125,290 to 130,349
deleted text end
new text begin
128,910 to 134,109 new text end |
2.5 percent |
deleted text begin 47deleted text end new text begin 45new text end percent |
$ |
deleted text begin
870
deleted text end
new text begin
1,400 new text end |
|
deleted text begin
130,350 to 135,409
deleted text end
new text begin
134,110 to 139,319 new text end |
2.5 percent |
deleted text begin 47deleted text end new text begin 45new text end percent |
$ |
deleted text begin
650
deleted text end
new text begin
1,170 new text end |
|
new text begin
139,320 to 147,499 new text end |
new text begin
2.5 percent new text end |
new text begin
50 percent new text end |
new text begin
$ new text end |
new text begin
750 new text end |
|
new text begin
147,500 to 155,000 new text end |
new text begin
2.5 percent new text end |
new text begin
50 percent new text end |
new text begin
$ new text end |
new text begin
250 new text end |
The payment made to a claimant shall be the amount of the state refund calculated under
this subdivision. No payment is allowed if the claimant's household income is $135,410 or
more.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective beginning with refunds based on property
taxes payable in 2026.
new text end
Sec. 5.
Minnesota Statutes 2024, section 290A.04, subdivision 4, is amended to read:
Subd. 4.
Inflation adjustment.
The commissioner shall annually adjust the dollar
amounts of the income thresholds and the maximum refunds under subdivision 2 as provided
in section 270C.22. The statutory year is deleted text begin 2023deleted text end new text begin 2025new text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective beginning with refunds based on property
taxes payable in 2027.
new text end