Minnesota 2023-2024 Regular Session

Minnesota House Bill HF493 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 and property tax refunds; allowing a
3	3	1.3 subtraction for all federally taxable Social Security income; reducing the first tier
4	4	1.4 income tax rate; increasing homestead credit state refunds; amending Minnesota
5	5	1.5 Statutes 2022, sections 290.0132, subdivision 26; 290.06, subdivisions 2c, 2d;
6	6	1.6 290A.04, subdivisions 2, 4.
7	7	1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
8	8	1.8 Section 1. Minnesota Statutes 2022, section 290.0132, subdivision 26, is amended to read:
9	9	1.9 Subd. 26.Social Security benefits.(a) A portion The amount of taxable Social Security
10	10	1.10benefits received by a taxpayer in the taxable year is allowed as a subtraction. The subtraction
11	11	1.11equals the lesser of taxable Social Security benefits or a maximum subtraction subject to
12	12	1.12the limits under paragraphs (b), (c), and (d).
13	13	1.13 (b) For married taxpayers filing a joint return and surviving spouses, the maximum
14	14	1.14subtraction equals $5,150. The maximum subtraction is reduced by 20 percent of provisional
15	15	1.15income over $78,180. In no case is the subtraction less than zero.
16	16	1.16 (c) For single or head-of-household taxpayers, the maximum subtraction equals $4,020.
17	17	1.17The maximum subtraction is reduced by 20 percent of provisional income over $61,080.
18	18	1.18In no case is the subtraction less than zero.
19	19	1.19 (d) For married taxpayers filing separate returns, the maximum subtraction equals
20	20	1.20one-half the maximum subtraction for joint returns under paragraph (b). The maximum
21	21	1.21subtraction is reduced by 20 percent of provisional income over one-half the threshold
22	22	1.22amount specified in paragraph (b). In no case is the subtraction less than zero.
23	23	1Section 1.
24	24	REVISOR EAP/HL 23-0173401/10/23
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. 493
30	30	NINETY-THIRD SESSION
31	31	Authored by Robbins, Davids, Witte and Burkel01/18/2023
32	32	The bill was read for the first time and referred to the Committee on Taxes 2.1 (e) For purposes of this subdivision, "provisional income" means modified adjusted
33	33	2.2gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of
34	34	2.3the taxable Social Security benefits received during the taxable year, and "Social Security
35	35	2.4benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.
36	36	2.5 (f) The commissioner shall adjust the maximum subtraction and threshold amounts in
37	37	2.6paragraphs (b) to (d) as provided in section 270C.22. The statutory year is taxable year
38	38	2.72019. The maximum subtraction and threshold amounts as adjusted must be rounded to the
39	39	2.8nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10
40	40	2.9amount.
41	41	2.10 EFFECTIVE DATE.This section is effective for taxable years beginning after December
42	42	2.1131, 2022.
43	43	2.12 Sec. 2. Minnesota Statutes 2022, section 290.06, subdivision 2c, is amended to read:
44	44	2.13 Subd. 2c.Schedules of rates for individuals, estates, and trusts.(a) The income taxes
45	45	2.14imposed by this chapter upon married individuals filing joint returns and surviving spouses
46	46	2.15as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
47	47	2.16their taxable net income the following schedule of rates:
48	48	2.17 (1) On the first $38,770 $43,950, 5.35 2.8 percent;
49	49	2.18 (2) On all over $38,770 $43,950, but not over $154,020 $174,610, 6.8 percent;
50	50	2.19 (3) On all over $154,020 $174,610, but not over $269,010 $304,970, 7.85 percent;
51	51	2.20 (4) On all over $269,010 $304,970, 9.85 percent.
52	52	2.21 Married individuals filing separate returns, estates, and trusts must compute their income
53	53	2.22tax by applying the above rates to their taxable income, except that the income brackets
54	54	2.23will be one-half of the above amounts after the adjustment required in subdivision 2d.
55	55	2.24 (b) The income taxes imposed by this chapter upon unmarried individuals must be
56	56	2.25computed by applying to taxable net income the following schedule of rates:
57	57	2.26 (1) On the first $26,520 $30,070, 5.35 2.8 percent;
58	58	2.27 (2) On all over $26,520 $30,070, but not over $87,110 $98,760, 6.8 percent;
59	59	2.28 (3) On all over $87,110 $98,760, but not over $161,720 $183,340, 7.85 percent;
60	60	2.29 (4) On all over $161,720 $183,340, 9.85 percent.
61	61	2Sec. 2.
62	62	REVISOR EAP/HL 23-0173401/10/23 3.1 (c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
63	63	3.2a head of household as defined in section 2(b) of the Internal Revenue Code must be
64	64	3.3computed by applying to taxable net income the following schedule of rates:
65	65	3.4 (1) On the first $32,650 $37,010, 5.35 2.8 percent;
66	66	3.5 (2) On all over $32,650 $37,010, but not over $131,190 $148,730, 6.8 percent;
67	67	3.6 (3) On all over $131,190 $148,730, but not over $214,980 $243,720, 7.85 percent;
68	68	3.7 (4) On all over $214,980 $243,720, 9.85 percent.
69	69	3.8 (d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
70	70	3.9of any individual taxpayer whose taxable net income for the taxable year is less than an
71	71	3.10amount determined by the commissioner must be computed in accordance with tables
72	72	3.11prepared and issued by the commissioner of revenue based on income brackets of not more
73	73	3.12than $100. The amount of tax for each bracket shall be computed at the rates set forth in
74	74	3.13this subdivision, provided that the commissioner may disregard a fractional part of a dollar
75	75	3.14unless it amounts to 50 cents or more, in which case it may be increased to $1.
76	76	3.15 (e) An individual who is not a Minnesota resident for the entire year must compute the
77	77	3.16individual's Minnesota income tax as provided in this subdivision. After the application of
78	78	3.17the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
79	79	3.18by a fraction in which:
80	80	3.19 (1) the numerator is the individual's Minnesota source federal adjusted gross income as
81	81	3.20defined in section 62 of the Internal Revenue Code and increased by:
82	82	3.21 (i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
83	83	3.2217, and 290.0137, paragraph (a); and reduced by
84	84	3.23 (ii) the Minnesota assignable portion of the subtraction for United States government
85	85	3.24interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
86	86	3.25subdivisions 9, 10, 14, 15, 17, 18, and 27, and 290.0137, paragraph (c), after applying the
87	87	3.26allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
88	88	3.27 (2) the denominator is the individual's federal adjusted gross income as defined in section
89	89	3.2862 of the Internal Revenue Code, increased by:
90	90	3.29 (i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
91	91	3.3017, and 290.0137, paragraph (a); and reduced by
92	92	3.31 (ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, and
93	93	3.3227, and 290.0137, paragraph (c).
94	94	3Sec. 2.
95	95	REVISOR EAP/HL 23-0173401/10/23 4.1 (f) If an individual who is not a Minnesota resident for the entire year is a qualifying
96	96	4.2owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
97	97	4.37a, paragraph (b), the individual must compute the individual's Minnesota income tax as
98	98	4.4provided in paragraph (e), and also must include, to the extent attributed to the electing
99	99	4.5qualifying entity:
100	100	4.6 (1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
101	101	4.7addition under section 290.0131, subdivision 5; and
102	102	4.8 (2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
103	103	4.9subtraction under section 290.0132, subdivision 3.
104	104	4.10 EFFECTIVE DATE.This section is effective for taxable years beginning after December
105	105	4.1131, 2022.
106	106	4.12 Sec. 3. Minnesota Statutes 2022, section 290.06, subdivision 2d, is amended to read:
107	107	4.13 Subd. 2d.Inflation adjustment of brackets.The commissioner shall annually adjust
108	108	4.14the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed
109	109	4.15in subdivision 2c as provided in section 270C.22. The statutory year is taxable year 2019
110	110	4.162023. The rate applicable to any rate bracket must not be changed. The dollar amounts
111	111	4.17setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate
112	112	4.18brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in
113	113	4.19$5, it must be rounded up to the nearest $10 amount. The commissioner shall determine the
114	114	4.20rate bracket for married filing separate returns after this adjustment is done. The rate bracket
115	115	4.21for married filing separate must be one-half of the rate bracket for married filing joint.
116	116	4.22 EFFECTIVE DATE.This section is effective for taxable years beginning after December
117	117	4.2331, 2023.
118	118	4.24 Sec. 4. Minnesota Statutes 2022, section 290A.04, subdivision 2, is amended to read:
119	119	4.25 Subd. 2.Homeowners; homestead credit refund.A claimant whose property taxes
120	120	4.26payable are in excess of the percentage of the household income stated below shall pay an
121	121	4.27amount equal to the percent of income shown for the appropriate household income level
122	122	4.28along with the percent to be paid by the claimant of the remaining amount of property taxes
123	123	4.29payable. The state refund equals the amount of property taxes payable that remain, up to
124	124	4.30the state refund amount shown below.
125	125	4Sec. 4.
126	126	REVISOR EAP/HL 23-0173401/10/23 5.1 Maximum
127	127	State
128	128	Refund
129	129	5.2 Percent Paid by
130	130	ClaimantPercent of Income5.3 Household Income
131	131	2,770
132	132	3,830$
133	133	15
134	134	10 percent1.0 percent
135	135	5.4 $0 to 1,739
136	136	5.5 2,090
137	137	2,770
138	138	3,830$
139	139	15
140	140	10 percent1.1 percent
141	141	5.6 1,740 to 3,459
142	142	5.7 2,091 to 4,160
143	143	2,770
144	144	3,830$
145	145	15
146	146	10 percent1.2 percent
147	147	5.8 3,460 to 5,239
148	148	5.9 4,161 to 6,300
149	149	2,770
150	150	3,830$
151	151	20
152	152	15 percent1.3 percent
153	153	5.10 5,240 to 6,989
154	154	5.11 6,301 to 8,400
155	155	2,770
156	156	3,830$
157	157	20
158	158	15 percent1.4 percent
159	159	5.12 6,990 to 8,719
160	160	5.13 8,401 to 10,480
161	161	2,770
162	162	3,830$
163	163	20
164	164	15 percent1.5 percent
165	165	5.14 8,720 to 12,219
166	166	5.15 10,481 to 14,680
167	167	2,770
168	168	3,830$
169	169	20
170	170	15 percent1.6 percent
171	171	5.16 12,220 to 13,949
172	172	5.17 14,681 to 16,760
173	173	2,770
174	174	3,830$
175	175	20
176	176	15 percent1.7 percent
177	177	5.18 13,950 to 15,709
178	178	5.19 16,761 to 18,880
179	179	2,770
180	180	3,830$
181	181	20
182	182	15 percent1.8 percent
183	183	5.20 15,710 to 17,449
184	184	5.21 18,881 to 20,970
185	185	2,770
186	186	3,830$
187	187	25
188	188	20 percent1.9 percent
189	189	5.22 17,450 to 19,179
190	190	5.23 20,971 to 23,040
191	191	2,770
192	192	3,830$
193	193	25
194	194	20 percent2.0 percent
195	195	5.24 19,180 to 24,429
196	196	5.25 23,041 to 29,350
197	197	2,770
198	198	3,830$
199	199	30
200	200	25 percent2.0 percent
201	201	5.26 24,430 to 26,169
202	202	5.27 29,351 to 31,440
203	203	2,770
204	204	3,830$
205	205	30
206	206	25 percent2.0 percent
207	207	5.28 26,170 to 29,669
208	208	5.29 31,441 to 35,650
209	209	2,770
210	210	3,830$
211	211	35
212	212	30 percent2.0 percent
213	213	5.30 29,670 to 41,859
214	214	5.31 35,651 to 50,290
215	215	2,240
216	216	3,190$
217	217	35
218	218	30 percent2.0 percent
219	219	5.32 41,860 to 61,049
220	220	5.33 50,291 to 73,350
221	221	1,960
222	222	2,850$
223	223	40
224	224	35 percent2.0 percent
225	225	5.34 61,050 to 69,769
226	226	5.35 73,351 to 83,830
227	227	1,620
228	228	2,450$
229	229	40
230	230	35 percent2.1 percent
231	231	5.36 69,770 to 78,499
232	232	5.37 83,831 to 94,320
233	233	1,450
234	234	2,240$
235	235	40
236	236	35 percent2.2 percent
237	237	5.38 78,500 to 87,219
238	238	5.39 94,321 to 104,790
239	239	1,270
240	240	2,030$
241	241	40
242	242	35 percent2.3 percent
243	243	5.40 87,220 to 95,939
244	244	5.41 104,791 to 115,270
245	245	1,070
246	246	1,790$
247	247	45
248	248	40 percent2.4 percent
249	249	5.42 95,940 to 101,179
250	250	5.43 115,271 to 121,570
251	251	890
252	252	1,570$
253	253	45
254	254	40 percent2.5 percent
255	255	5.44 101,180 to 104,689
256	256	5.45 121,571 to 125,780
257	257	5Sec. 4.
258	258	REVISOR EAP/HL 23-0173401/10/23 730
259	259	1,380$
260	260	50
261	261	45 percent2.5 percent
262	262	6.1 104,690 to 108,919
263	263	6.2 125,781 to 130,870
264	264	540
265	265	1,150$
266	266	50
267	267	45 percent2.5 percent
268	268	6.3 108,920 to 113,149
269	269	6.4 130,871 to 135,950
270	270	750$50 percent2.5 percent6.5 135,951 to 145,000
271	271	250$50 percent2.5 percent6.6 145,001 to 155,000
272	272	6.7 The payment made to a claimant shall be the amount of the state refund calculated under
273	273	6.8this subdivision. No payment is allowed if the claimant's household income is $113,150
274	274	6.9$155,001 or more.
275	275	6.10 EFFECTIVE DATE.This section is effective beginning with refunds based on property
276	276	6.11taxes payable in 2024.
277	277	6.12 Sec. 5. Minnesota Statutes 2022, section 290A.04, subdivision 4, is amended to read:
278	278	6.13 Subd. 4.Inflation adjustment.The commissioner shall annually adjust the dollar
279	279	6.14amounts of the income thresholds and the maximum refunds under subdivisions 2 and 2a
280	280	6.15as provided in section 270C.22. The statutory year for the renter's credit under subdivision
281	281	6.162a is 2018. The statutory year for the homestead credit refund is 2023.
282	282	6Sec. 5.
283	283	REVISOR EAP/HL 23-0173401/10/23