Minnesota 2023-2024 Regular Session

Minnesota Senate Bill SF17 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	23-00801 as introduced12/20/22 REVISOR EAP/NS
25	25	SENATE
26	26	STATE OF MINNESOTA
27	27	S.F. No. 17NINETY-THIRD SESSION
28	28	(SENATE AUTHORS: SEEBERGER and Drazkowski)
29	29	OFFICIAL STATUSD-PGDATE
30	30	Introduction and first reading01/04/2023
31	31	Referred to Taxes 2.1the taxable Social Security benefits received during the taxable year, and "Social Security
32	32	2.2benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.
33	33	2.3 (f) The commissioner shall adjust the maximum subtraction and threshold amounts in
34	34	2.4paragraphs (b) to (d) as provided in section 270C.22. The statutory year is taxable year
35	35	2.52019. The maximum subtraction and threshold amounts as adjusted must be rounded to the
36	36	2.6nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10
37	37	2.7amount.
38	38	2.8 EFFECTIVE DATE.This section is effective for taxable years beginning after December
39	39	2.931, 2022.
40	40	2.10 Sec. 2. Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
41	41	2.11to read:
42	42	2.12 Subd. 31.Public pension income subtraction.(a) The amount of a taxpayer's public
43	43	2.13pension exclusion is a subtraction.
44	44	2.14 (b) The amount of a taxpayer's federal exclusion is determined as follows:
45	45	2.15 (1) for a taxpayer whose provisional income is less than or equal to the base amount,
46	46	2.16the federal exclusion equals 100 percent of qualified benefits received during the taxable
47	47	2.17year;
48	48	2.18 (2) for a taxpayer whose provisional income exceeds the base amount, but is less than
49	49	2.19or equal to the adjusted base amount, the federal exclusion equals the greater of:
50	50	2.20 (i) 50 percent of qualified benefits received during the taxable year; or
51	51	2.21 (ii) the amount of qualified benefits minus 50 percent of the difference between
52	52	2.22provisional income and the base amount; and
53	53	2.23 (3) for a taxpayer whose provisional income exceeds the adjusted base amount, the
54	54	2.24federal exclusion equals the greater of:
55	55	2.25 (i) qualified benefits minus:
56	56	2.26 (A) 85 percent of provisional income in excess of the adjusted base amount; plus
57	57	2.27 (B) 50 percent of the difference between the base amount and the adjusted base amount;
58	58	2.28or
59	59	2.29 (ii) 15 percent of qualified benefits received during the taxable year.
60	60	2.30 (c) The amount of a taxpayer's state exclusion equals the lesser of:
61	61	2Sec. 2.
62	62	23-00801 as introduced12/20/22 REVISOR EAP/NS 3.1 (1) the amount of qualified benefits in excess of the taxpayer's federal exclusion; or
63	63	3.2 (2) the maximum exclusion for a taxpayer determined under paragraph (d).
64	64	3.3 (d) The maximum state exclusion equals $5,450 for a joint return, half that amount for
65	65	3.4a married taxpayer filing a separate return, and $4,260 for all other taxpayers. The maximum
66	66	3.5subtraction is reduced by 20 percent of provisional income in excess of:
67	67	3.6 (1) $82,770 for a joint return;
68	68	3.7 (2) half the amount in clause (1) for a married taxpayer filing a separate return; and
69	69	3.8 (3) $64,670 for all other filers.
70	70	3.9 (e) For the purposes of this subdivision:
71	71	3.10 (1) "base amount" has the meaning given in section 86(c)(1) of the Internal Revenue
72	72	3.11Code and "adjusted base amount" has the meaning given in section 86(c)(2) of the Internal
73	73	3.12Revenue Code;
74	74	3.13 (2) "provisional income" has the meaning given in section 290.0132, subdivision 26,
75	75	3.14paragraph (e);
76	76	3.15 (3) "public pension exclusion" means the sum of the federal exclusion calculated under
77	77	3.16paragraph (b) and the state exclusion calculated under paragraphs (c) and (d); and
78	78	3.17 (4) "qualified benefits" means any amount received:
79	79	3.18 (i) by a basic member of any pension plan governed by chapter 3A, 352B, 353, 354, or
80	80	3.19354A, or the basic member's survivor, provided that the annuity or benefit is based on service
81	81	3.20for which the member or survivor is not also receiving Social Security benefits;
82	82	3.21 (ii) from any retirement system administered by the federal government that is based on
83	83	3.22service for which the recipient or the recipient's survivor is not also receiving Social Security
84	84	3.23benefits; or
85	85	3.24 (iii) from a public retirement system of or created by another state or any of its political
86	86	3.25subdivisions if the income tax laws of the other state permit a similar deduction or exemption
87	87	3.26or a reciprocal deduction or exemption of a retirement or pension benefit received from a
88	88	3.27public retirement system of or created by this state or any political subdivision of this state.
89	89	3.28 (f) The commissioner must adjust the maximum exclusion and phaseout threshold
90	90	3.29amounts in paragraph (d) as provided in section 270C.22. The statutory year is taxable year
91	91	3.302022. The maximum subtraction and threshold amounts as adjusted must be rounded to the
92	92	3Sec. 2.
93	93	23-00801 as introduced12/20/22 REVISOR EAP/NS 4.1nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10
94	94	4.2amount.
95	95	4.3 EFFECTIVE DATE.This section is effective for taxable years beginning after December
96	96	4.431, 2022.
97	97	4.5 Sec. 3. Minnesota Statutes 2022, section 290.091, subdivision 2, is amended to read:
98	98	4.6 Subd. 2.Definitions.For purposes of the tax imposed by this section, the following
99	99	4.7terms have the meanings given.
100	100	4.8 (a) "Alternative minimum taxable income" means the sum of the following for the taxable
101	101	4.9year:
102	102	4.10 (1) the taxpayer's federal alternative minimum taxable income as defined in section
103	103	4.1155(b)(2) of the Internal Revenue Code;
104	104	4.12 (2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
105	105	4.13taxable income, but excluding:
106	106	4.14 (i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
107	107	4.15 (ii) the medical expense deduction;
108	108	4.16 (iii) the casualty, theft, and disaster loss deduction; and
109	109	4.17 (iv) the impairment-related work expenses of a person with a disability;
110	110	4.18 (3) for depletion allowances computed under section 613A(c) of the Internal Revenue
111	111	4.19Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
112	112	4.20to the extent not included in federal alternative minimum taxable income, the excess of the
113	113	4.21deduction for depletion allowable under section 611 of the Internal Revenue Code for the
114	114	4.22taxable year over the adjusted basis of the property at the end of the taxable year (determined
115	115	4.23without regard to the depletion deduction for the taxable year);
116	116	4.24 (4) to the extent not included in federal alternative minimum taxable income, the amount
117	117	4.25of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
118	118	4.26Code determined without regard to subparagraph (E);
119	119	4.27 (5) to the extent not included in federal alternative minimum taxable income, the amount
120	120	4.28of interest income as provided by section 290.0131, subdivision 2;
121	121	4.29 (6) the amount of addition required by section 290.0131, subdivisions 9, 10, and 16;
122	122	4.30 (7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent
123	123	4.31not included in the addition required under clause (6); and
124	124	4Sec. 3.
125	125	23-00801 as introduced12/20/22 REVISOR EAP/NS 5.1 (8) to the extent not included in federal alternative minimum taxable income, the amount
126	126	5.2of foreign-derived intangible income deducted under section 250 of the Internal Revenue
127	127	5.3Code;
128	128	5.4 less the sum of the amounts determined under the following:
129	129	5.5 (i) interest income as defined in section 290.0132, subdivision 2;
130	130	5.6 (ii) an overpayment of state income tax as provided by section 290.0132, subdivision
131	131	5.73, to the extent included in federal alternative minimum taxable income;
132	132	5.8 (iii) the amount of investment interest paid or accrued within the taxable year on
133	133	5.9indebtedness to the extent that the amount does not exceed net investment income, as defined
134	134	5.10in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
135	135	5.11in computing federal adjusted gross income;
136	136	5.12 (iv) amounts subtracted from federal taxable or adjusted gross income as provided by
137	137	5.13section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, and 26 to 29, and 31;
138	138	5.14 (v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
139	139	5.15paragraph (c); and
140	140	5.16 (vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
141	141	5.17subdivision 7.
142	142	5.18 In the case of an estate or trust, alternative minimum taxable income must be computed
143	143	5.19as provided in section 59(c) of the Internal Revenue Code, except alternative minimum
144	144	5.20taxable income must be increased by the addition in section 290.0131, subdivision 16.
145	145	5.21 (b) "Investment interest" means investment interest as defined in section 163(d)(3) of
146	146	5.22the Internal Revenue Code.
147	147	5.23 (c) "Net minimum tax" means the minimum tax imposed by this section.
148	148	5.24 (d) "Regular tax" means the tax that would be imposed under this chapter (without regard
149	149	5.25to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
150	150	5.26under this chapter.
151	151	5.27 (e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
152	152	5.28after subtracting the exemption amount determined under subdivision 3.
153	153	5.29 EFFECTIVE DATE.This section is effective for taxable years beginning after December
154	154	5.3031, 2022.
155	155	5Sec. 3.
156	156	23-00801 as introduced12/20/22 REVISOR EAP/NS