Individual income tax provisions modified, and income tax subtraction for volunteer firefighter pension benefits established.
Impact
The introduction of this bill is expected to have significant implications for state tax policy, particularly in how pension benefits for volunteer firefighters are treated. By allowing for a subtraction from taxable income, HF2652 aims to mitigate the financial burden on these individuals, ensuring that their contributions to public safety are acknowledged and rewarded in the tax code. The effective date for this provision is set for taxable years beginning after December 31, 2022, meaning that eligible individuals will be able to benefit in future tax filings.
Summary
House File 2652 (HF2652) introduces modifications to Minnesota's individual income tax provisions, with a focus on establishing an income tax subtraction for volunteer firefighter pension benefits. Specifically, the bill amends the Minnesota Statutes to include a provision that allows taxpayers to subtract service pensions, disability benefits, or survivor benefits received under certain retirement plans from their taxable income. This legislation aims to provide financial relief for volunteer firefighters who rely on these pension benefits, recognizing their community service and the sacrifices made during their volunteer tenure.
Contention
While the bill has garnered support for providing tax relief to volunteer firefighters, it may also bring forth discussions regarding the overall impact on state revenue. Critics might argue that allowing such subtractions could lead to decreased tax revenues for the state, potentially affecting funding for other essential services. Furthermore, there may be scrutiny around whether all volunteer firefighters are equally benefiting from this, leading to potential calls for broader tax relief measures that encompass additional community service roles.
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