Minnesota 2023-2024 Regular Session

Minnesota Senate Bill SF1895 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	23-01734 as introduced01/10/23 REVISOR EAP/HL
25	25	SENATE
26	26	STATE OF MINNESOTA
27	27	S.F. No. 1895NINETY-THIRD SESSION
28	28	(SENATE AUTHORS: NELSON)
29	29	OFFICIAL STATUSD-PGDATE
30	30	Introduction and first reading02/20/2023
31	31	Referred to Taxes 2.1 (e) For purposes of this subdivision, "provisional income" means modified adjusted
32	32	2.2gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of
33	33	2.3the taxable Social Security benefits received during the taxable year, and "Social Security
34	34	2.4benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.
35	35	2.5 (f) The commissioner shall adjust the maximum subtraction and threshold amounts in
36	36	2.6paragraphs (b) to (d) as provided in section 270C.22. The statutory year is taxable year
37	37	2.72019. The maximum subtraction and threshold amounts as adjusted must be rounded to the
38	38	2.8nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10
39	39	2.9amount.
40	40	2.10 EFFECTIVE DATE.This section is effective for taxable years beginning after December
41	41	2.1131, 2022.
42	42	2.12 Sec. 2. Minnesota Statutes 2022, section 290.06, subdivision 2c, is amended to read:
43	43	2.13 Subd. 2c.Schedules of rates for individuals, estates, and trusts.(a) The income taxes
44	44	2.14imposed by this chapter upon married individuals filing joint returns and surviving spouses
45	45	2.15as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
46	46	2.16their taxable net income the following schedule of rates:
47	47	2.17 (1) On the first $38,770 $43,950, 5.35 2.8 percent;
48	48	2.18 (2) On all over $38,770 $43,950, but not over $154,020 $174,610, 6.8 percent;
49	49	2.19 (3) On all over $154,020 $174,610, but not over $269,010 $304,970, 7.85 percent;
50	50	2.20 (4) On all over $269,010 $304,970, 9.85 percent.
51	51	2.21 Married individuals filing separate returns, estates, and trusts must compute their income
52	52	2.22tax by applying the above rates to their taxable income, except that the income brackets
53	53	2.23will be one-half of the above amounts after the adjustment required in subdivision 2d.
54	54	2.24 (b) The income taxes imposed by this chapter upon unmarried individuals must be
55	55	2.25computed by applying to taxable net income the following schedule of rates:
56	56	2.26 (1) On the first $26,520 $30,070, 5.35 2.8 percent;
57	57	2.27 (2) On all over $26,520 $30,070, but not over $87,110 $98,760, 6.8 percent;
58	58	2.28 (3) On all over $87,110 $98,760, but not over $161,720 $183,340, 7.85 percent;
59	59	2.29 (4) On all over $161,720 $183,340, 9.85 percent.
60	60	2Sec. 2.
61	61	23-01734 as introduced01/10/23 REVISOR EAP/HL 3.1 (c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
62	62	3.2a head of household as defined in section 2(b) of the Internal Revenue Code must be
63	63	3.3computed by applying to taxable net income the following schedule of rates:
64	64	3.4 (1) On the first $32,650 $37,010, 5.35 2.8 percent;
65	65	3.5 (2) On all over $32,650 $37,010, but not over $131,190 $148,730, 6.8 percent;
66	66	3.6 (3) On all over $131,190 $148,730, but not over $214,980 $243,720, 7.85 percent;
67	67	3.7 (4) On all over $214,980 $243,720, 9.85 percent.
68	68	3.8 (d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
69	69	3.9of any individual taxpayer whose taxable net income for the taxable year is less than an
70	70	3.10amount determined by the commissioner must be computed in accordance with tables
71	71	3.11prepared and issued by the commissioner of revenue based on income brackets of not more
72	72	3.12than $100. The amount of tax for each bracket shall be computed at the rates set forth in
73	73	3.13this subdivision, provided that the commissioner may disregard a fractional part of a dollar
74	74	3.14unless it amounts to 50 cents or more, in which case it may be increased to $1.
75	75	3.15 (e) An individual who is not a Minnesota resident for the entire year must compute the
76	76	3.16individual's Minnesota income tax as provided in this subdivision. After the application of
77	77	3.17the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
78	78	3.18by a fraction in which:
79	79	3.19 (1) the numerator is the individual's Minnesota source federal adjusted gross income as
80	80	3.20defined in section 62 of the Internal Revenue Code and increased by:
81	81	3.21 (i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
82	82	3.2217, and 290.0137, paragraph (a); and reduced by
83	83	3.23 (ii) the Minnesota assignable portion of the subtraction for United States government
84	84	3.24interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
85	85	3.25subdivisions 9, 10, 14, 15, 17, 18, and 27, and 290.0137, paragraph (c), after applying the
86	86	3.26allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
87	87	3.27 (2) the denominator is the individual's federal adjusted gross income as defined in section
88	88	3.2862 of the Internal Revenue Code, increased by:
89	89	3.29 (i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
90	90	3.3017, and 290.0137, paragraph (a); and reduced by
91	91	3.31 (ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, and
92	92	3.3227, and 290.0137, paragraph (c).
93	93	3Sec. 2.
94	94	23-01734 as introduced01/10/23 REVISOR EAP/HL 4.1 (f) If an individual who is not a Minnesota resident for the entire year is a qualifying
95	95	4.2owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
96	96	4.37a, paragraph (b), the individual must compute the individual's Minnesota income tax as
97	97	4.4provided in paragraph (e), and also must include, to the extent attributed to the electing
98	98	4.5qualifying entity:
99	99	4.6 (1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
100	100	4.7addition under section 290.0131, subdivision 5; and
101	101	4.8 (2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
102	102	4.9subtraction under section 290.0132, subdivision 3.
103	103	4.10 EFFECTIVE DATE.This section is effective for taxable years beginning after December
104	104	4.1131, 2022.
105	105	4.12 Sec. 3. Minnesota Statutes 2022, section 290.06, subdivision 2d, is amended to read:
106	106	4.13 Subd. 2d.Inflation adjustment of brackets.The commissioner shall annually adjust
107	107	4.14the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed
108	108	4.15in subdivision 2c as provided in section 270C.22. The statutory year is taxable year 2019
109	109	4.162023. The rate applicable to any rate bracket must not be changed. The dollar amounts
110	110	4.17setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate
111	111	4.18brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in
112	112	4.19$5, it must be rounded up to the nearest $10 amount. The commissioner shall determine the
113	113	4.20rate bracket for married filing separate returns after this adjustment is done. The rate bracket
114	114	4.21for married filing separate must be one-half of the rate bracket for married filing joint.
115	115	4.22 EFFECTIVE DATE.This section is effective for taxable years beginning after December
116	116	4.2331, 2023.
117	117	4.24 Sec. 4. Minnesota Statutes 2022, section 290A.04, subdivision 2, is amended to read:
118	118	4.25 Subd. 2.Homeowners; homestead credit refund.A claimant whose property taxes
119	119	4.26payable are in excess of the percentage of the household income stated below shall pay an
120	120	4.27amount equal to the percent of income shown for the appropriate household income level
121	121	4.28along with the percent to be paid by the claimant of the remaining amount of property taxes
122	122	4.29payable. The state refund equals the amount of property taxes payable that remain, up to
123	123	4.30the state refund amount shown below.
124	124	4Sec. 4.
125	125	23-01734 as introduced01/10/23 REVISOR EAP/HL 5.1 Maximum
126	126	State
127	127	Refund
128	128	5.2 Percent Paid by
129	129	ClaimantPercent of Income5.3 Household Income
130	130	2,770
131	131	3,830$
132	132	15
133	133	10 percent1.0 percent
134	134	5.4 $0 to 1,739
135	135	5.5 2,090
136	136	2,770
137	137	3,830$
138	138	15
139	139	10 percent1.1 percent
140	140	5.6 1,740 to 3,459
141	141	5.7 2,091 to 4,160
142	142	2,770
143	143	3,830$
144	144	15
145	145	10 percent1.2 percent
146	146	5.8 3,460 to 5,239
147	147	5.9 4,161 to 6,300
148	148	2,770
149	149	3,830$
150	150	20
151	151	15 percent1.3 percent
152	152	5.10 5,240 to 6,989
153	153	5.11 6,301 to 8,400
154	154	2,770
155	155	3,830$
156	156	20
157	157	15 percent1.4 percent
158	158	5.12 6,990 to 8,719
159	159	5.13 8,401 to 10,480
160	160	2,770
161	161	3,830$
162	162	20
163	163	15 percent1.5 percent
164	164	5.14 8,720 to 12,219
165	165	5.15 10,481 to 14,680
166	166	2,770
167	167	3,830$
168	168	20
169	169	15 percent1.6 percent
170	170	5.16 12,220 to 13,949
171	171	5.17 14,681 to 16,760
172	172	2,770
173	173	3,830$
174	174	20
175	175	15 percent1.7 percent
176	176	5.18 13,950 to 15,709
177	177	5.19 16,761 to 18,880
178	178	2,770
179	179	3,830$
180	180	20
181	181	15 percent1.8 percent
182	182	5.20 15,710 to 17,449
183	183	5.21 18,881 to 20,970
184	184	2,770
185	185	3,830$
186	186	25
187	187	20 percent1.9 percent
188	188	5.22 17,450 to 19,179
189	189	5.23 20,971 to 23,040
190	190	2,770
191	191	3,830$
192	192	25
193	193	20 percent2.0 percent
194	194	5.24 19,180 to 24,429
195	195	5.25 23,041 to 29,350
196	196	2,770
197	197	3,830$
198	198	30
199	199	25 percent2.0 percent
200	200	5.26 24,430 to 26,169
201	201	5.27 29,351 to 31,440
202	202	2,770
203	203	3,830$
204	204	30
205	205	25 percent2.0 percent
206	206	5.28 26,170 to 29,669
207	207	5.29 31,441 to 35,650
208	208	2,770
209	209	3,830$
210	210	35
211	211	30 percent2.0 percent
212	212	5.30 29,670 to 41,859
213	213	5.31 35,651 to 50,290
214	214	2,240
215	215	3,190$
216	216	35
217	217	30 percent2.0 percent
218	218	5.32 41,860 to 61,049
219	219	5.33 50,291 to 73,350
220	220	1,960
221	221	2,850$
222	222	40
223	223	35 percent2.0 percent
224	224	5.34 61,050 to 69,769
225	225	5.35 73,351 to 83,830
226	226	1,620
227	227	2,450$
228	228	40
229	229	35 percent2.1 percent
230	230	5.36 69,770 to 78,499
231	231	5.37 83,831 to 94,320
232	232	1,450
233	233	2,240$
234	234	40
235	235	35 percent2.2 percent
236	236	5.38 78,500 to 87,219
237	237	5.39 94,321 to 104,790
238	238	1,270
239	239	2,030$
240	240	40
241	241	35 percent2.3 percent
242	242	5.40 87,220 to 95,939
243	243	5.41 104,791 to 115,270
244	244	1,070
245	245	1,790$
246	246	45
247	247	40 percent2.4 percent
248	248	5.42 95,940 to 101,179
249	249	5.43 115,271 to 121,570
250	250	890
251	251	1,570$
252	252	45
253	253	40 percent2.5 percent
254	254	5.44 101,180 to 104,689
255	255	5.45 121,571 to 125,780
256	256	5Sec. 4.
257	257	23-01734 as introduced01/10/23 REVISOR EAP/HL 730
258	258	1,380$
259	259	50
260	260	45 percent2.5 percent
261	261	6.1 104,690 to 108,919
262	262	6.2 125,781 to 130,870
263	263	540
264	264	1,150$
265	265	50
266	266	45 percent2.5 percent
267	267	6.3 108,920 to 113,149
268	268	6.4 130,871 to 135,950
269	269	750$50 percent2.5 percent6.5 135,951 to 145,000
270	270	250$50 percent2.5 percent6.6 145,001 to 155,000
271	271	6.7 The payment made to a claimant shall be the amount of the state refund calculated under
272	272	6.8this subdivision. No payment is allowed if the claimant's household income is $113,150
273	273	6.9$155,001 or more.
274	274	6.10 EFFECTIVE DATE.This section is effective beginning with refunds based on property
275	275	6.11taxes payable in 2024.
276	276	6.12 Sec. 5. Minnesota Statutes 2022, section 290A.04, subdivision 4, is amended to read:
277	277	6.13 Subd. 4.Inflation adjustment.The commissioner shall annually adjust the dollar
278	278	6.14amounts of the income thresholds and the maximum refunds under subdivisions 2 and 2a
279	279	6.15as provided in section 270C.22. The statutory year for the renter's credit under subdivision
280	280	6.162a is 2018. The statutory year for the homestead credit refund is 2023.
281	281	6Sec. 5.
282	282	23-01734 as introduced01/10/23 REVISOR EAP/HL