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Minnesota Legislature

Office of the Revisor of Statutes

SF 151

as introduced - 91st Legislature (2019 - 2020) Posted on 01/17/2019 01:29pm

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; providing a subtraction for income from
certain public pension plans; amending Minnesota Statutes 2018, sections 290.0132,
by adding a subdivision; 290.091, subdivision 2.

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

Section 1.

Minnesota Statutes 2018, section 290.0132, is amended by adding a subdivision
to read:


new text begin Subd. 27. new text end

new text begin Public pension income. new text end

new text begin (a) An amount of an annuity or benefit defined in
paragraph (b), subject to the limitations in paragraph (c), is a subtraction.
new text end

new text begin (b) For purposes of this subdivision, the following definitions apply:
new text end

new text begin (1) "annuity or benefit" 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;
and
new text end

new text begin (2) "modified adjusted gross income" has the meaning given in section 86(b)(2) of the
Internal Revenue Code.
new text end

new text begin (c) The subtraction under paragraph (a) equals:
new text end

new text begin (1) 100 percent of the annuity or benefit amount if the sum of modified adjusted gross
income and one-half the annual amount of annuity or benefit received is less than (i) $34,001
for married couples filing a joint return; and (ii) $25,001 for individual or head of household
filers, or married couples filing separately who maintained separate residences for all of the
taxable year;
new text end

new text begin (2) the lesser of:
new text end

new text begin (i) 50 percent of the annuity or benefit amount; or
new text end

new text begin (ii) 50 percent of the amount by which the sum of modified adjusted gross income plus
one half of the annuity or benefit amount exceeds:
new text end

new text begin (A) $34,000 for married couples filing a joint return; or
new text end

new text begin (B) $25,000 for individual or head of household filers, or married couples filing separately
who maintained separate residences for all of the taxable year.
new text end

new text begin This clause applies only if the sum of modified adjusted gross income and one-half the
annual amount of annuity or pension benefits is more than (i) $34,000 but less than $44,001
for married couples filing a joint return; and (ii) $25,000 but less than $32,001 for individual
or head of household filers, or married couples filing separately who maintained separate
residences for all of the taxable year; or
new text end

new text begin (3) the lesser of:
new text end

new text begin (i) 15 percent of the annuity or benefit amount; or
new text end

new text begin (ii) 15 percent of the amount by which the sum of modified adjusted gross income plus
one half of the annuity or benefit amount exceeds:
new text end

new text begin (A) $44,000 for married couples filing a joint return; and
new text end

new text begin (B) $32,000 for individual or head of household filers, or married couples filing separately
who maintained separate residences for all of the taxable year.
new text end

new text begin This clause applies only if the sum of modified adjusted gross income and one-half the
annual amount of annuity or pension benefits is more than (i) $44,000 for married couples
filing a joint return; and (ii) $32,000 for individual or head of household filers, or married
couples filing separately who maintained separate residences for all of the taxable year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2018.
new text end

Sec. 2.

Minnesota Statutes 2018, section 290.091, subdivision 2, is amended to read:


Subd. 2.

Definitions.

For purposes of the tax imposed by this section, the following
terms have the meanings given.

(a) "Alternative minimum taxable income" means the sum of the following for the taxable
year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a disabled person;

(3) for depletion allowances computed under section 613A(c) of the Internal Revenue
Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
to the extent not included in federal alternative minimum taxable income, the excess of the
deduction for depletion allowable under section 611 of the Internal Revenue Code for the
taxable year over the adjusted basis of the property at the end of the taxable year (determined
without regard to the depletion deduction for the taxable year);

(4) to the extent not included in federal alternative minimum taxable income, the amount
of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative minimum taxable income, the amount
of interest income as provided by section 290.0131, subdivision 2; and

(6) the amount of addition required by section 290.0131, subdivisions 9 to 11;

less the sum of the amounts determined under the following:

(i) interest income as defined in section 290.0132, subdivision 2;

(ii) an overpayment of state income tax as provided by section 290.0132, subdivision
3
, to the extent included in federal alternative minimum taxable income;

(iii) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as defined
in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
in computing federal adjusted gross income;

(iv) amounts subtracted from federal taxable income as provided by section 290.0132,
subdivisions 7
, 9 to 15, 17, 21, 24, deleted text beginanddeleted text end 26new text begin, and 27new text end; and

(v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
paragraph (c).

In the case of an estate or trust, alternative minimum taxable income must be computed
as provided in section 59(c) of the Internal Revenue Code.

(b) "Investment interest" means investment interest as defined in section 163(d)(3) of
the Internal Revenue Code.

(c) "Net minimum tax" means the minimum tax imposed by this section.

(d) "Regular tax" means the tax that would be imposed under this chapter (without regard
to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
under this chapter.

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
after subtracting the exemption amount determined under subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2018.
new text end