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SF 1945

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/10/2021 03:48pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to taxation; individual income; limiting maximum amount of itemized
deductions; amending Minnesota Statutes 2020, section 290.0122, subdivisions
1, 2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2020, section 290.0122, subdivision 1, is amended to read:


Subdivision 1.

Itemized deductions.

A taxpayer's itemized deductions equal the sum
of the amounts allowed as a deduction under this section, deleted text beginreduced by the amount calculateddeleted text endnew text begin
subject to the reduction and limitation
new text end under subdivision 2.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end

Sec. 2.

Minnesota Statutes 2020, section 290.0122, subdivision 2, is amended to read:


Subd. 2.

Deductions limited; inflation adjustment.

(a) The itemized deductions of a
taxpayer with adjusted gross income in excess of the applicable amount are reduced by the
lesser of:

(1) three percent of the excess of the taxpayer's federal adjusted gross income over the
applicable amount; or

(2) 80 percent of the amount of the taxpayer's itemized deductions.

new text begin (b) After the reduction in paragraph (a), a taxpayer's itemized deductions are limited to
$50,000 per taxable year for married taxpayers filing joint returns, and $25,000 per taxable
year for all other taxpayers.
new text end

deleted text begin (b)deleted text endnew text begin (c)new text end "Applicable amount" means $194,650, or $97,325 for a married individual filing
a separate return.

deleted text begin (c)deleted text endnew text begin (d)new text end For the purposes of this subdivision, "itemized deductions" means the itemized
deductions otherwise allowable to the taxpayer under subdivision 1, except itemized
deductions excludes:

(1) the portion of the deduction for interest under subdivision 5 that represents investment
interest;

(2) the deduction for medical expenses under subdivision 6; and

(3) the deduction for losses under subdivision 8.

deleted text begin (d)deleted text endnew text begin (e)new text end For taxable years beginning after December 31, 2019, the commissioner must
adjust for inflation the applicable amounts under paragraph deleted text begin(b)deleted text endnew text begin (c)new text end as provided in section
270C.22. The statutory year is taxable year 2019. The amounts as adjusted must be rounded
down to the nearest $50 amount. The threshold amount for married individuals filing separate
returns must be one-half of the adjusted amount for married individuals filing joint returns.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2020.
new text end