HF 828

as introduced - 94th Legislature (2025 - 2026) Posted on 02/17/2025 02:49pm

A bill for an act
relating to taxation; individual income; providing an unlimited Social Security
subtraction; amending Minnesota Statutes 2024, section 290.0132, subdivision
26.

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

Section 1.

Minnesota Statutes 2024, section 290.0132, subdivision 26, is amended to read:

Subd. 26.

Social Security benefits.

deleted text begin (a) A taxpayer is allowed a subtraction equal to the
greater of the simplified subtraction allowed under paragraph (b) or the alternate subtraction
determined under paragraph (e).
deleted text end

deleted text begin (b) A taxpayer's simplified subtraction equals the amount of taxable social security
benefits, as reduced under paragraphs (c) and (d).
deleted text end

deleted text begin (c) For a taxpayer other than a married taxpayer filing a separate return with adjusted
gross income above the phaseout threshold, the simplified subtraction is reduced by ten
percent for each $4,000 of adjusted gross income, or fraction thereof, in excess of the
phaseout threshold. The phaseout threshold equals:
deleted text end

deleted text begin (1) $100,000 for a married taxpayer filing a joint return or surviving spouse;
deleted text end

deleted text begin (2) $78,000 for a single or head of household taxpayer; and
deleted text end

deleted text begin (3) for a married taxpayer filing a separate return, half the amount for a married taxpayer
filing a joint return.
deleted text end

deleted text begin (d) For a married taxpayer filing a separate return, the simplified subtraction is reduced
by ten percent for each $2,000 of adjusted gross income, or fraction thereof, in excess of
the phaseout threshold.
deleted text end

deleted text begin (e) A taxpayer's alternate subtraction equals the lesser of taxable Social Security benefits
or a maximum subtraction subject to the limits under paragraphs (f), (g), and (h).
deleted text end

deleted text begin (f) For married taxpayers filing a joint return and surviving spouses, the maximum
subtraction under paragraph (c) equals $5,840. The maximum subtraction is reduced by 20
percent of provisional income over $88,630. In no case is the subtraction less than zero.
deleted text end

deleted text begin (g) For single or head-of-household taxpayers, the maximum subtraction under paragraph
(c) equals $4,560. The maximum subtraction is reduced by 20 percent of provisional income
over $69,250. In no case is the subtraction less than zero.
deleted text end

deleted text begin (h) For married taxpayers filing separate returns, the maximum subtraction under
paragraph (c) equals one-half the maximum subtraction for joint returns under paragraph
(f). The maximum subtraction is reduced by 20 percent of provisional income over one-half
the threshold amount specified in paragraph (d). In no case is the subtraction less than zero.
deleted text end

deleted text begin (i) 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 (j) The commissioner shall adjust the phaseout threshold amounts in paragraphs (c) and
(d) as provided in section 270C.22. The statutory year is taxable year 2023. 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 (a) The amount of Social Security benefits received is a subtraction.
new text end

new text begin (b) For the purposes of this section, "Social Security benefits" has the meaning given in
section 86(d)(1) of the Internal Revenue Code.
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, 2024.
new text end