Minnesota Legislature
SF 3906
as introduced - 92nd Legislature (2021 - 2022) Posted on 03/10/2022 04:47pm
Current Version - as introduced
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A bill for an act
relating to taxation; individual income; increasing the maximum subtraction for
Social Security benefits, allowing a subtraction for certain pension 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.
deleted text beginSocial Securitydeleted text endnew text begin Retirementnew text end benefits.
(a) A portion of deleted text begintaxable Social Securitydeleted text endnew text begin
qualified retirementnew text end benefits is allowed as a subtraction. The subtraction equals the lesser
of deleted text begintaxable Social Securitydeleted text endnew text begin qualified retirementnew text end 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 deleted text begin$5,150deleted text endnew text begin $7,000new text end. The maximum subtraction is reduced by 20 percent of
provisional income over deleted text begin$78,180deleted text endnew text begin $81,630new text end. In no case is the subtraction less than zero.
(c) For single or head-of-household taxpayers, the maximum subtraction equals deleted text begin$4,020deleted text endnew text begin
$5,460new text end. The maximum subtraction is reduced by 20 percent of provisional income over
deleted text begin $61,080deleted text endnew text begin $63,770new text end. 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 subdivisiondeleted text begin,deleted text endnew text begin:
new text end
new text begin (1)new text end "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 yeardeleted text begin,deleted text endnew text begin;
new text end
new text begin
(2) "qualified public pension benefits" means any amount received:
new text end
new text begin
(i) by a basic member of any pension plan governed by chapter 3A, 352B, 353, 354, or
354A, or the basic member's survivor, provided that the annuity or benefit is based on service
for which the member or survivor is not also receiving Social Security benefits;
new text end
new text begin
(ii) from any retirement system administered by the federal government that is based on
service for which the recipient or the recipient's survivor is not also receiving Social Security
benefits; or
new text end
new text begin
(iii) from a public retirement system of or created by another state or any of its political
subdivisions if the income tax laws of the other state permit a similar deduction or exemption
or a reciprocal deduction or exemption of a retirement or pension benefit received from a
public retirement system of or created by this state or any political subdivision of this state;
new text end
new text begin (3) "qualified retirement benefits" means the sum of a taxpayer's taxable Social Security
benefits and qualified public pension benefits;new text end and
new text begin (4)new text end "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 deleted text begin2019deleted text endnew text begin
2022new text end. 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, 2021.
new text end