Minnesota 2023-2024 Regular Session

Minnesota House Bill HF300 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to taxation; individual income; establishing a public pension benefit
3	3	1.3 subtraction; amending Minnesota Statutes 2022, sections 290.0132, subdivision
4	4	1.4 26, by adding a subdivision; 290.091, subdivision 2.
5	5	1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
6	6	1.6 Section 1. Minnesota Statutes 2022, section 290.0132, subdivision 26, is amended to read:
7	7	1.7 Subd. 26.Social Security benefits.(a) A portion The amount of taxable Social Security
8	8	1.8benefits received by a taxpayer in the taxable year is allowed as a subtraction. The subtraction
9	9	1.9equals the lesser of taxable Social Security benefits or a maximum subtraction subject to
10	10	1.10the limits under paragraphs (b), (c), and (d).
11	11	1.11 (b) For married taxpayers filing a joint return and surviving spouses, the maximum
12	12	1.12subtraction equals $5,150. The maximum subtraction is reduced by 20 percent of provisional
13	13	1.13income over $78,180. In no case is the subtraction less than zero.
14	14	1.14 (c) For single or head-of-household taxpayers, the maximum subtraction equals $4,020.
15	15	1.15The maximum subtraction is reduced by 20 percent of provisional income over $61,080.
16	16	1.16In no case is the subtraction less than zero.
17	17	1.17 (d) For married taxpayers filing separate returns, the maximum subtraction equals
18	18	1.18one-half the maximum subtraction for joint returns under paragraph (b). The maximum
19	19	1.19subtraction is reduced by 20 percent of provisional income over one-half the threshold
20	20	1.20amount specified in paragraph (b). In no case is the subtraction less than zero.
21	21	1.21 (e) For purposes of this subdivision, "provisional income" means modified adjusted
22	22	1.22gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of
23	23	1Section 1.
24	24	REVISOR EAP/LN 23-0079812/19/22
25	25	State of Minnesota
26	26	This Document can be made available
27	27	in alternative formats upon request
28	28	HOUSE OF REPRESENTATIVES
29	29	H. F. No. 300
30	30	NINETY-THIRD SESSION
31	31	Authored by Lislegard, Brand, Wolgamott, Stephenson, Norris and others01/11/2023
32	32	The bill was read for the first time and referred to the Committee on Taxes 2.1the taxable Social Security benefits received during the taxable year, and "Social Security
33	33	2.2benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.
34	34	2.3 (f) The commissioner shall adjust the maximum subtraction and threshold amounts in
35	35	2.4paragraphs (b) to (d) as provided in section 270C.22. The statutory year is taxable year
36	36	2.52019. The maximum subtraction and threshold amounts as adjusted must be rounded to the
37	37	2.6nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10
38	38	2.7amount.
39	39	2.8 EFFECTIVE DATE.This section is effective for taxable years beginning after December
40	40	2.931, 2022.
41	41	2.10 Sec. 2. Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
42	42	2.11to read:
43	43	2.12 Subd. 31.Public pension income subtraction.(a) The amount of a taxpayer's public
44	44	2.13pension exclusion is a subtraction.
45	45	2.14 (b) The amount of a taxpayer's federal exclusion is determined as follows:
46	46	2.15 (1) for a taxpayer whose provisional income is less than or equal to the base amount,
47	47	2.16the federal exclusion equals 100 percent of qualified benefits received during the taxable
48	48	2.17year;
49	49	2.18 (2) for a taxpayer whose provisional income exceeds the base amount, but is less than
50	50	2.19or equal to the adjusted base amount, the federal exclusion equals the greater of:
51	51	2.20 (i) 50 percent of qualified benefits received during the taxable year; or
52	52	2.21 (ii) the amount of qualified benefits minus 50 percent of the difference between
53	53	2.22provisional income and the base amount; and
54	54	2.23 (3) for a taxpayer whose provisional income exceeds the adjusted base amount, the
55	55	2.24federal exclusion equals the greater of:
56	56	2.25 (i) qualified benefits minus:
57	57	2.26 (A) 85 percent of provisional income in excess of the adjusted base amount; plus
58	58	2.27 (B) 50 percent of the difference between the base amount and the adjusted base amount;
59	59	2.28or
60	60	2.29 (ii) 15 percent of qualified benefits received during the taxable year.
61	61	2.30 (c) The amount of a taxpayer's state exclusion equals the lesser of:
62	62	2Sec. 2.
63	63	REVISOR EAP/LN 23-0079812/19/22 3.1 (1) the amount of qualified benefits in excess of the taxpayer's federal exclusion; or
64	64	3.2 (2) the maximum exclusion for a taxpayer determined under paragraph (d).
65	65	3.3 (d) The maximum state exclusion equals $5,450 for a joint return, half that amount for
66	66	3.4a married taxpayer filing a separate return, and $4,260 for all other taxpayers. The maximum
67	67	3.5subtraction is reduced by 20 percent of provisional income in excess of:
68	68	3.6 (1) $82,770 for a joint return;
69	69	3.7 (2) half the amount in clause (1) for a married taxpayer filing a separate return; and
70	70	3.8 (3) $64,670 for all other filers.
71	71	3.9 (e) For the purposes of this subdivision:
72	72	3.10 (1) "base amount" has the meaning given in section 86(c)(1) of the Internal Revenue
73	73	3.11Code and "adjusted base amount" has the meaning given in section 86(c)(2) of the Internal
74	74	3.12Revenue Code;
75	75	3.13 (2) "provisional income" has the meaning given in section 290.0132, subdivision 26,
76	76	3.14paragraph (e);
77	77	3.15 (3) "public pension exclusion" means the sum of the federal exclusion calculated under
78	78	3.16paragraph (b) and the state exclusion calculated under paragraphs (c) and (d); and
79	79	3.17 (4) "qualified benefits" means any amount received:
80	80	3.18 (i) by a basic member of any pension plan governed by chapter 3A, 352B, 353, 354, or
81	81	3.19354A, or the basic member's survivor, provided that the annuity or benefit is based on service
82	82	3.20for which the member or survivor is not also receiving Social Security benefits;
83	83	3.21 (ii) from any retirement system administered by the federal government that is based on
84	84	3.22service for which the recipient or the recipient's survivor is not also receiving Social Security
85	85	3.23benefits; or
86	86	3.24 (iii) from a public retirement system of or created by another state or any of its political
87	87	3.25subdivisions if the income tax laws of the other state permit a similar deduction or exemption
88	88	3.26or a reciprocal deduction or exemption of a retirement or pension benefit received from a
89	89	3.27public retirement system of or created by this state or any political subdivision of this state.
90	90	3.28 (f) The commissioner must adjust the maximum exclusion and phaseout threshold
91	91	3.29amounts in paragraph (d) as provided in section 270C.22. The statutory year is taxable year
92	92	3.302022. The maximum subtraction and threshold amounts as adjusted must be rounded to the
93	93	3Sec. 2.
94	94	REVISOR EAP/LN 23-0079812/19/22 4.1nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10
95	95	4.2amount.
96	96	4.3 EFFECTIVE DATE.This section is effective for taxable years beginning after December
97	97	4.431, 2022.
98	98	4.5 Sec. 3. Minnesota Statutes 2022, section 290.091, subdivision 2, is amended to read:
99	99	4.6 Subd. 2.Definitions.For purposes of the tax imposed by this section, the following
100	100	4.7terms have the meanings given.
101	101	4.8 (a) "Alternative minimum taxable income" means the sum of the following for the taxable
102	102	4.9year:
103	103	4.10 (1) the taxpayer's federal alternative minimum taxable income as defined in section
104	104	4.1155(b)(2) of the Internal Revenue Code;
105	105	4.12 (2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
106	106	4.13taxable income, but excluding:
107	107	4.14 (i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
108	108	4.15 (ii) the medical expense deduction;
109	109	4.16 (iii) the casualty, theft, and disaster loss deduction; and
110	110	4.17 (iv) the impairment-related work expenses of a person with a disability;
111	111	4.18 (3) for depletion allowances computed under section 613A(c) of the Internal Revenue
112	112	4.19Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
113	113	4.20to the extent not included in federal alternative minimum taxable income, the excess of the
114	114	4.21deduction for depletion allowable under section 611 of the Internal Revenue Code for the
115	115	4.22taxable year over the adjusted basis of the property at the end of the taxable year (determined
116	116	4.23without regard to the depletion deduction for the taxable year);
117	117	4.24 (4) to the extent not included in federal alternative minimum taxable income, the amount
118	118	4.25of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
119	119	4.26Code determined without regard to subparagraph (E);
120	120	4.27 (5) to the extent not included in federal alternative minimum taxable income, the amount
121	121	4.28of interest income as provided by section 290.0131, subdivision 2;
122	122	4.29 (6) the amount of addition required by section 290.0131, subdivisions 9, 10, and 16;
123	123	4.30 (7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent
124	124	4.31not included in the addition required under clause (6); and
125	125	4Sec. 3.
126	126	REVISOR EAP/LN 23-0079812/19/22 5.1 (8) to the extent not included in federal alternative minimum taxable income, the amount
127	127	5.2of foreign-derived intangible income deducted under section 250 of the Internal Revenue
128	128	5.3Code;
129	129	5.4 less the sum of the amounts determined under the following:
130	130	5.5 (i) interest income as defined in section 290.0132, subdivision 2;
131	131	5.6 (ii) an overpayment of state income tax as provided by section 290.0132, subdivision
132	132	5.73, to the extent included in federal alternative minimum taxable income;
133	133	5.8 (iii) the amount of investment interest paid or accrued within the taxable year on
134	134	5.9indebtedness to the extent that the amount does not exceed net investment income, as defined
135	135	5.10in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
136	136	5.11in computing federal adjusted gross income;
137	137	5.12 (iv) amounts subtracted from federal taxable or adjusted gross income as provided by
138	138	5.13section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, and 26 to 29, and 31;
139	139	5.14 (v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
140	140	5.15paragraph (c); and
141	141	5.16 (vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
142	142	5.17subdivision 7.
143	143	5.18 In the case of an estate or trust, alternative minimum taxable income must be computed
144	144	5.19as provided in section 59(c) of the Internal Revenue Code, except alternative minimum
145	145	5.20taxable income must be increased by the addition in section 290.0131, subdivision 16.
146	146	5.21 (b) "Investment interest" means investment interest as defined in section 163(d)(3) of
147	147	5.22the Internal Revenue Code.
148	148	5.23 (c) "Net minimum tax" means the minimum tax imposed by this section.
149	149	5.24 (d) "Regular tax" means the tax that would be imposed under this chapter (without regard
150	150	5.25to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
151	151	5.26under this chapter.
152	152	5.27 (e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
153	153	5.28after subtracting the exemption amount determined under subdivision 3.
154	154	5.29 EFFECTIVE DATE.This section is effective for taxable years beginning after December
155	155	5.3031, 2022.
156	156	5Sec. 3.
157	157	REVISOR EAP/LN 23-0079812/19/22