SF 952

Introduction - 94th Legislature (2025 - 2026)

Posted on 02/10/2025 06:28 p.m.

A bill for an act
relating to taxation; individual income; phasing out the amount of Social Security
income subject to tax; amending Minnesota Statutes 2024, section 290.0132,
subdivision 26.

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.

(a) A taxpayer is allowed a subtraction equal to the
greater of the simplified subtraction allowed under paragraph (b) deleted text begin or deleted text end new text begin , new text end the new text begin first new text end alternate
subtraction determined under paragraph (e) new text begin , or the second alternate subtraction determined
under paragraph (f) new text end .

(b) A taxpayer's simplified subtraction equals the amount of taxable social security
benefits, as reduced under paragraphs (c) and (d).

(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:

(1) $100,000 for a married taxpayer filing a joint return or surviving spouse;

(2) $78,000 for a single or head of household taxpayer; and

(3) for a married taxpayer filing a separate return, half the amount for a married taxpayer
filing a joint return.

(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.

(e) A taxpayer's new text begin first new text end alternate subtraction equals the lesser of taxable Social Security
benefits or a maximum subtraction subject to the limits under paragraphs deleted text begin (f) deleted text end , (g), deleted text begin and deleted text end (h) new text begin ,
and (i) new text end .

new text begin (f) A taxpayer's second alternate subtraction equals the following amounts:
new text end

new text begin (1) for taxable years beginning after December 31, 2024 and before January 1, 2026,
ten percent of taxable Social Security benefits;
new text end

new text begin (2) for taxable years beginning after December 31, 2025 and before January 1, 2027, 20
percent of taxable Social Security benefits;
new text end

new text begin (3) for taxable years beginning after December 31, 2026 and before January 1, 2028, 30
percent of taxable Social Security benefits;
new text end

new text begin (4) for taxable years beginning after December 31, 2027 and before January 1, 2029, 40
percent of taxable Social Security benefits;
new text end

new text begin (5) for taxable years beginning after December 31, 2028 and before January 1, 2030, 50
percent of taxable Social Security benefits;
new text end

new text begin (6) for taxable years beginning after December 31, 2029 and before January 1, 2031, 60
percent of taxable Social Security benefits;
new text end

new text begin (7) for taxable years beginning after December 31, 2030 and before January 1, 2032, 70
percent of taxable Social Security benefits;
new text end

new text begin (8) for taxable years beginning after December 31, 2031 and before January 1, 2033, 80
percent of taxable Social Security benefits;
new text end

new text begin (9) for taxable years beginning after December 31, 2032 and before January 1, 2034, 90
percent of taxable Social Security benefits; and
new text end

new text begin (10) for taxable years beginning after December 31, 2033 and before January 1, 2035,
100 percent of taxable Social Security benefits.
new text end

deleted text begin (f) deleted text end new text begin (g) new text end For married taxpayers filing a joint return and surviving spouses, the maximum
subtraction under paragraph deleted text begin (c) deleted text end new text begin (e) new text end 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 begin (g) deleted text end new text begin (h) new text end For single or head-of-household taxpayers, the maximum subtraction under
paragraph deleted text begin (c) deleted text end new text begin (e) new text end 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 begin (h) deleted text end new text begin (i) new text end For married taxpayers filing separate returns, the maximum subtraction under
paragraph deleted text begin (c) deleted text end new text begin (e) new text end equals one-half the maximum subtraction for joint returns under paragraph
deleted text begin (f) deleted text end new text begin (g) new text end . The maximum subtraction new text begin under paragraph (e) new text end 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 begin (i) deleted text end new text begin (j) new text end 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 begin (j) deleted text end new text begin (k) new text end The commissioner shall adjust the phaseout threshold amounts in deleted text begin paragraphs (c)
and (d) deleted text end new text begin paragraph (c), clauses (1) and (2), new text end 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.

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