Minnesota Legislature
HF 493
as introduced - 93rd Legislature (2023 - 2024) Posted on 02/01/2023 05:19pm
Bill Text Versions
| Engrossments | ||
|---|---|---|
| Introduction | Posted on 01/17/2023 |
Current Version - as introduced
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A bill for an act
relating to taxation; individual income and property tax refunds; allowing a
subtraction for all federally taxable Social Security income; reducing the first tier
income tax rate; increasing homestead credit state refunds; amending Minnesota
Statutes 2022, 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 2022, section 290.0132, subdivision 26, is amended to read:
Subd. 26.
Social Security benefits.
(a) deleted text begin A portiondeleted text end new text begin The amountnew text end of deleted text begin taxabledeleted text end Social Security
benefitsnew text begin received by a taxpayer in the taxable yearnew text end is allowed as a subtraction. deleted text begin The subtraction
equals the lesser of taxable Social Security benefits or a maximum subtraction subject to
the limits under paragraphs (b), (c), and (d).
deleted text end
deleted text begin
(b) For married taxpayers filing a joint return and surviving spouses, the maximum
subtraction equals $5,150. The maximum subtraction is reduced by 20 percent of provisional
income over $78,180. In no case is the subtraction less than zero.
deleted text end
deleted text begin
(c) For single or head-of-household taxpayers, the maximum subtraction equals $4,020.
The maximum subtraction is reduced by 20 percent of provisional income over $61,080.
In no case is the subtraction less than zero.
deleted text end
deleted text begin
(d) For married taxpayers filing separate returns, the maximum subtraction equals
one-half the maximum subtraction for joint returns under paragraph (b). The maximum
subtraction is reduced by 20 percent of provisional income over one-half the threshold
amount specified in paragraph (b). In no case is the subtraction less than zero.
deleted text end
deleted text begin
(e) 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
(f) The commissioner shall adjust the maximum subtraction and threshold amounts in
paragraphs (b) to (d) as provided in section 270C.22. The statutory year is taxable year
2019. 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 EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2022.
new text end
Sec. 2.
Minnesota Statutes 2022, 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 $43,950new 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 $43,950new text end , but not over deleted text begin $154,020deleted text end new text begin $174,610new text end , 6.8 percent;
(3) On all over deleted text begin $154,020deleted text end new text begin $174,610new text end , but not over deleted text begin $269,010deleted text end new text begin $304,970new text end , 7.85 percent;
(4) On all over deleted text begin $269,010deleted text end new text begin $304,970new 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 $30,070new 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 $30,070new text end , but not over deleted text begin $87,110deleted text end new text begin $98,760new text end , 6.8 percent;
(3) On all over deleted text begin $87,110deleted text end new text begin $98,760new text end , but not over deleted text begin $161,720deleted text end new text begin $183,340new text end , 7.85 percent;
(4) On all over deleted text begin $161,720deleted text end new text begin $183,340new 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 $37,010new text end , deleted text begin 5.35deleted text end new text begin 2.8new text end percent;
(2) On all over deleted text begin $32,650deleted text end new text begin $37,010new text end , but not over deleted text begin $131,190deleted text end new text begin $148,730new text end , 6.8 percent;
(3) On all over deleted text begin $131,190deleted text end new text begin $148,730new text end , but not over deleted text begin $214,980deleted text end new text begin $243,720new text end , 7.85 percent;
(4) On all over deleted text begin $214,980deleted text end new text begin $243,720new 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, and
17, 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, and 27, 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, and
17, and 290.0137, paragraph (a); and reduced by
(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, and
27, 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, 2022.
new text end
Sec. 3.
Minnesota Statutes 2022, 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
2023new 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, 2023.
new text end
Sec. 4.
Minnesota Statutes 2022, 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 1,739 deleted text end new text begin 2,090 new text end |
1.0 percent |
deleted text begin 15 deleted text end new text begin 10new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
1,740 to 3,459 deleted text end new text begin 2,091 to 4,160 new text end |
1.1 percent |
deleted text begin 15 deleted text end new text begin 10new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
3,460 to 5,239 deleted text end new text begin 4,161 to 6,300 new text end |
1.2 percent |
deleted text begin 15 deleted text end new text begin 10new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
5,240 to 6,989 deleted text end new text begin 6,301 to 8,400 new text end |
1.3 percent |
deleted text begin 20 deleted text end new text begin 15new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
6,990 to 8,719 deleted text end new text begin 8,401 to 10,480 new text end |
1.4 percent |
deleted text begin 20 deleted text end new text begin 15new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
8,720 to 12,219 deleted text end new text begin 10,481 to 14,680 new text end |
1.5 percent |
deleted text begin 20 deleted text end new text begin 15new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
12,220 to 13,949 deleted text end new text begin 14,681 to 16,760 new text end |
1.6 percent |
deleted text begin 20 deleted text end new text begin 15new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
13,950 to 15,709 deleted text end new text begin 16,761 to 18,880 new text end |
1.7 percent |
deleted text begin 20 deleted text end new text begin 15new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
15,710 to 17,449 deleted text end new text begin 18,881 to 20,970 new text end |
1.8 percent |
deleted text begin 20 deleted text end new text begin 15new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
17,450 to 19,179 deleted text end new text begin 20,971 to 23,040 new text end |
1.9 percent |
deleted text begin 25 deleted text end new text begin 20new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
19,180 to 24,429 deleted text end new text begin 23,041 to 29,350 new text end |
2.0 percent |
deleted text begin 25 deleted text end new text begin 20new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
24,430 to 26,169 deleted text end new text begin 29,351 to 31,440 new text end |
2.0 percent |
deleted text begin 30 deleted text end new text begin 25new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
26,170 to 29,669 deleted text end new text begin 31,441 to 35,650 new text end |
2.0 percent |
deleted text begin 30 deleted text end new text begin 25new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
29,670 to 41,859 deleted text end new text begin 35,651 to 50,290 new text end |
2.0 percent |
deleted text begin 35 deleted text end new text begin 30new text end percent |
$ |
deleted text begin
2,770 deleted text end new text begin 3,830 new text end |
|
deleted text begin
41,860 to 61,049 deleted text end new text begin 50,291 to 73,350 new text end |
2.0 percent |
deleted text begin 35 deleted text end new text begin 30new text end percent |
$ |
deleted text begin
2,240 deleted text end new text begin 3,190 new text end |
|
deleted text begin
61,050 to 69,769 deleted text end new text begin 73,351 to 83,830 new text end |
2.0 percent |
deleted text begin 40 deleted text end new text begin 35new text end percent |
$ |
deleted text begin
1,960 deleted text end new text begin 2,850 new text end |
|
deleted text begin
69,770 to 78,499 deleted text end new text begin 83,831 to 94,320 new text end |
2.1 percent |
deleted text begin 40 deleted text end new text begin 35new text end percent |
$ |
deleted text begin
1,620 deleted text end new text begin 2,450 new text end |
|
deleted text begin
78,500 to 87,219 deleted text end new text begin 94,321 to 104,790 new text end |
2.2 percent |
deleted text begin 40 deleted text end new text begin 35new text end percent |
$ |
deleted text begin
1,450 deleted text end new text begin 2,240 new text end |
|
deleted text begin
87,220 to 95,939 deleted text end new text begin 104,791 to 115,270 new text end |
2.3 percent |
deleted text begin 40 deleted text end new text begin 35new text end percent |
$ |
deleted text begin
1,270 deleted text end new text begin 2,030 new text end |
|
deleted text begin
95,940 to 101,179 deleted text end new text begin 115,271 to 121,570 new text end |
2.4 percent |
deleted text begin 45 deleted text end new text begin 40new text end percent |
$ |
deleted text begin
1,070 deleted text end new text begin 1,790 new text end |
|
deleted text begin
101,180 to 104,689 deleted text end new text begin 121,571 to 125,780 new text end |
2.5 percent |
deleted text begin 45 deleted text end new text begin 40new text end percent |
$ |
deleted text begin
890 deleted text end new text begin 1,570 new text end |
|
deleted text begin
104,690 to 108,919 deleted text end new text begin 125,781 to 130,870 new text end |
2.5 percent |
deleted text begin 50 deleted text end new text begin 45new text end percent |
$ |
deleted text begin
730 deleted text end new text begin 1,380 new text end |
|
deleted text begin
108,920 to 113,149 deleted text end new text begin 130,871 to 135,950 new text end |
2.5 percent |
deleted text begin 50 deleted text end new text begin 45new text end percent |
$ |
deleted text begin
540 deleted text end new text begin 1,150 new text end |
|
new text begin
135,951 to 145,000 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
750 new text end |
|
new text begin
145,001 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 deleted text begin $113,150deleted text end new text begin
$155,001new text end 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 2024.
new text end
Sec. 5.
Minnesota Statutes 2022, 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 subdivisions 2 and 2a
as provided in section 270C.22. The statutory yearnew text begin for the renter's credit under subdivision
2anew text end is 2018.new text begin The statutory year for the homestead credit refund is 2023.
new text end