SF 2805

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/04/2022 10:02am

A bill for an act
relating to taxation; individual income; allowing a phased-in full subtraction of
Social Security benefits; amending Minnesota Statutes 2020, section 290.0132,
subdivision 26.

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

Section 1.

Minnesota Statutes 2020, section 290.0132, subdivision 26, is amended to read:

Subd. 26.

Social Security benefits.

(a) A portion of taxable Social Security benefits is
allowed as a subtraction. The subtraction equals the lesser of taxable Social Security benefits
or a maximum subtraction subject to the limits under paragraphs (b), (c), and (d).

(b) For married taxpayers filing a joint return and surviving spouses, the maximum
subtraction equals $5,150 $5,450. The maximum subtraction is reduced by 20 percent of
provisional income over $78,180 $82,770. In no case is the subtraction less than zero.

(c) For single or head-of-household taxpayers, the maximum subtraction equals $4,020
$4,260. The maximum subtraction is reduced by 20 percent of provisional income over
$61,080 $64,670. In no case is the subtraction less than zero.

(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.

(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.

(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
2022. 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.

(g) In addition to the subtraction determined under paragraphs (a) to (f), a taxpayer is
allowed a subtraction equal to a percent of Social Security benefits not allowed as a
subtraction under paragraphs (a) to (f) as follows:

(1) 32 percent for taxable years beginning after December 31, 2021, and before January
1, 2023;

(2) 43 percent for taxable years beginning after December 31, 2022, and before January
1, 2024;

(3) 55 percent for taxable years beginning after December 31, 2023, and before January
1, 2025;

(4) 67 percent for taxable years beginning after December 31, 2024, and before January
1, 2026;

(5) 77 percent for taxable years beginning after December 31, 2025, and before January
1, 2027;

(6) 89 percent for taxable years beginning after December 31, 2026, and before January
1, 2028; and

(7) 100 percent for taxable years beginning after December 31, 2027.

EFFECTIVE DATE.

This section is effective the day following final enactment.