Minnesota 2023-2024 Regular Session

Minnesota Senate Bill SF25 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		1.1 A bill for an act
2	2		1.2 relating to taxation; individual income and corporate franchise; providing for
3	3		1.3 certain conformity to federal tax provisions; amending Minnesota Statutes 2022,
4		-	1.4 sections 289A.02, subdivision 7; ~~289A.08, subdivisions 7, 7a;~~ 290.01, ~~subdivisions~~
5		-	1.5 ~~19, 31, by adding a subdivision; 290.0123,~~ subdivision 3; 290.0131, by adding
6		-	1.6 ~~subdivisions; 290.0132,~~ by adding ~~subdivisions~~; 290.0133, by adding a subdivision;
7		-	1.7 ~~290.0134, by adding~~ a subdivision; 290.06, subdivision 2c; 290.~~0671~~, subdivision
8		-	1.8 ~~1a; 290.0675, subdivision 1; 290.091,~~ subdivision 2; 290.095, subdivision 11;
9		-	1.9 ~~290A.03, subdivision 15; 291.005,~~ subdivision 1; ~~repealing~~ Minnesota Statutes
10		-	1.10 ~~2022, section~~ 290.~~0111~~.
	4	+	1.4 sections 289A.02, subdivision 7; 290.01, by adding a subdivision; 290.0123,
	5	+	1.5 subdivision 3; 290.0131, by adding a subdivision; 290.0132, subdivisions 18, 24,
	6	+	1.6 by adding a subdivision; 290.0133, by adding a subdivision; 290.0134, by adding
	7	+	1.7 a subdivision; 290.0671, subdivision 1a; 290.0675, subdivision 1; 290.091,
	8	+	1.8 subdivision 2; 290.095, subdivision 11; 290A.03, subdivision 15; 291.005,
	9	+	1.9 subdivision 1; Minnesota Statutes 2023 Supplement, sections 289A.08, subdivision
	10	+	1.10 7; 290.01, subdivisions 19, 31; 290.06, subdivision 2c.
11	11		1.11BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
12	12		1.12 Section 1. Minnesota Statutes 2022, section 289A.02, subdivision 7, is amended to read:
13	13		1.13 Subd. 7.Internal Revenue Code.Unless specifically defined otherwise, "Internal
14	14		1.14Revenue Code" means the Internal Revenue Code of 1986, as amended through December
15	15		1.1531, 2018 December 15, 2022.
16	16		1.16 EFFECTIVE DATE.This section is effective the day following final enactment, except
17	17		1.17the changes incorporated by federal changes are effective retroactively at the same time the
18	18		1.18changes were effective for federal purposes.
19	19		1.19 Sec. 2. Minnesota Statutes 2022, section 289A.08, subdivision 7, is amended to read:
20	20		1.20 Subd. 7.Composite income tax returns for nonresident partners, shareholders, and
21	21		1.21beneficiaries.(a) The commissioner may allow a partnership with nonresident partners to
22	22		1.22file a composite return and to pay the tax on behalf of nonresident partners who have no
23	23		1.23other Minnesota source income. This composite return must include the names, addresses,
24	24		1Sec. 2.
25		-	~~S0025-1 1st Engrossment~~~~SF25~~ REVISOR EAP
	25	+	23-01509 as introduced12/28/22 REVISOR EAP/HL
26	26		SENATE
27	27		STATE OF MINNESOTA
28	28		S.F. No. 25NINETY-THIRD SESSION
29		-	(SENATE AUTHORS: REST, Klein~~, Weber, Nelson~~ and ~~Dibble~~)
	29	+	(SENATE AUTHORS: REST, Klein and Weber)
30	30		OFFICIAL STATUSD-PGDATE
31		-	Introduction and first reading7501/04/2023
32		-	Referred to Taxes
33		-	Comm report: To pass as amended01/09/2023
34		-	Second reading
35		-	Authors added Nelson; Dibble 2.1Social Security numbers, income allocation, and tax liability for the nonresident partners
	31	+	Introduction and first reading01/04/2023
	32	+	Referred to Taxes 2.1Social Security numbers, income allocation, and tax liability for the nonresident partners
36	33		2.2electing to be covered by the composite return.
37	34		2.3 (b) The computation of a partner's tax liability must be determined by multiplying the
38	35		2.4income allocated to that partner by the highest rate used to determine the tax liability for
39	36		2.5individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard
40	37		2.6deductions, or personal exemptions are not allowed.
41	38		2.7 (c) The partnership must submit a request to use this composite return filing method for
42	39		2.8nonresident partners. The requesting partnership must file a composite return in the form
43	40		2.9prescribed by the commissioner of revenue. The filing of a composite return is considered
44	41		2.10a request to use the composite return filing method.
45	42		2.11 (d) The electing partner must not have any Minnesota source income other than the
46	43		2.12income from the partnership, other electing partnerships, and other qualifying entities
47	44		2.13electing to file and pay the pass-through entity tax under subdivision 7a. If it is determined
48	45		2.14that the electing partner has other Minnesota source income, the inclusion of the income
49	46		2.15and tax liability for that partner under this provision will not constitute a return to satisfy
50	47		2.16the requirements of subdivision 1. The tax paid for the individual as part of the composite
51	48		2.17return is allowed as a payment of the tax by the individual on the date on which the composite
52	49		2.18return payment was made. If the electing nonresident partner has no other Minnesota source
53	50		2.19income, filing of the composite return is a return for purposes of subdivision 1.
54	51		2.20 (e) This subdivision does not negate the requirement that an individual pay estimated
55	52		2.21tax if the individual's liability would exceed the requirements set forth in section 289A.25.
56	53		2.22The individual's liability to pay estimated tax is, however, satisfied when the partnership
57	54		2.23pays composite estimated tax in the manner prescribed in section 289A.25.
58	55		2.24 (f) If an electing partner's share of the partnership's gross income from Minnesota sources
59	56		2.25is less than the filing requirements for a nonresident under this subdivision, the tax liability
60	57		2.26is zero. However, a statement showing the partner's share of gross income must be included
61	58		2.27as part of the composite return.
62	59		2.28 (g) The election provided in this subdivision is only available to a partner who has no
63	60		2.29other Minnesota source income and who is either (1) a full-year nonresident individual or
64	61		2.30(2) a trust or estate that does not claim a deduction under either section 651 or 661 of the
65	62		2.31Internal Revenue Code.
66	63		2.32 (h) A corporation defined in section 290.9725 and its nonresident shareholders may
67	64		2.33make an election under this paragraph. The provisions covering the partnership apply to
68	65		2.34the corporation and the provisions applying to the partner apply to the shareholder.
69	66		2Sec. 2.
70		-	~~S0025-1 1st Engrossment~~~~SF25~~ REVISOR EAP 3.1 (i) Estates and trusts distributing current income only and the nonresident individual
	67	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 3.1 (i) Estates and trusts distributing current income only and the nonresident individual
71	68		3.2beneficiaries of the estates or trusts may make an election under this paragraph. The
72	69		3.3provisions covering the partnership apply to the estate or trust. The provisions applying to
73	70		3.4the partner apply to the beneficiary.
74	71		3.5 (j) For the purposes of this subdivision, "income" means the partner's share of federal
75	72		3.6adjusted gross income from the partnership modified by the additions provided in section
76		-	3.7290.0131, subdivisions 8 to 10, 16, and 17, ~~19,~~ and 20, and the subtractions provided in:
77		-	3.~~8(1) section~~ 290.0132, subdivisions 9, 27, and 28, ~~31, and 32,~~ to the extent the amount is
78		-	3.~~9assignable or allocable~~ to Minnesota under section 290.17; and (2) section 290.0132,
79		-	3.~~10subdivision~~ 14. The subtraction allowed under section 290.0132, subdivision 9, is ~~only~~
80		-	3.~~11allowed~~ on the composite tax computation to the extent the electing partner would ~~have~~
81		-	3.~~12been~~ allowed the subtraction.
82		-	3.13 EFFECTIVE DATE.This section is effective ~~retroactively~~ for taxable years beginning
83		-	3.~~14after December 31~~, ~~2017~~.
84		-	3.15 Sec. 3. Minnesota Statutes 2022, section ~~289A~~.08, subdivision 7a, is amended to read:
85		-	3.16 Subd. 7a.~~Pass-through entity tax~~.(a) For ~~the purposes of this subdivision~~, ~~the following~~
86		-	3.~~17terms have~~ the ~~meanings given:~~
87		-	3.~~18 (1) "income" has~~ the ~~meaning given in subdivision 7~~, ~~paragraph (j), modified by the~~
88		-	3.~~19addition provided~~ in ~~section 290.0131~~, ~~subdivision 5, and~~ the ~~subtraction provided in section~~
89		-	3.~~20290.0132, subdivision 3,~~ ~~except that~~ the ~~provisions that apply to a partnership apply to a~~
90		-	3.~~21qualifying entity and the provisions that apply to a partner apply to a qualifying owner. The~~
91		-	3.~~22income of both a resident~~ and ~~nonresident qualifying owner is allocated and assigned~~ to
92		-	3.~~23this state as provided~~ for ~~nonresident partners and shareholders under sections 290.17,~~
93		-	3.~~24290~~.~~191~~, and 290.~~20;~~
94		-	3.25 (2) ~~"qualifying entity"~~ ~~means~~ a ~~partnership, limited liability~~ company, or ~~S corporation~~
95		-	3.~~26including a qualified subchapter S subsidiary organized under section 1361~~(~~b)(3)(B~~) of the
96		-	3.~~27Internal~~ Revenue Code~~. Qualifying entity does not include a partnership~~, ~~limited liability~~
97		-	3.~~28company, or corporation~~ that ~~has a partnership, limited liability company other than a~~
98		-	3.~~29disregarded entity,~~ ~~or corporation as~~ a ~~partner,~~ ~~member, or shareholder; and~~
99		-	3.~~30 (3) "qualifying~~ ~~owner" means:~~
100		-	3.31 (i) ~~a resident or nonresident individual or estate that is a partner,~~ ~~member, or shareholder~~
101		-	3.~~32of~~ a ~~qualifying entity;~~ or
	73	+	3.7290.0131, subdivisions 8 to 10, 16, and 17, and 19, and the subtractions provided in: (1)
	74	+	3.8section 290.0132, subdivisions 9, 27, and 28, to the extent the amount is assignable or
	75	+	3.9allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision
	76	+	3.10subdivisions 14 and 31. The subtraction allowed under section 290.0132, subdivision 9, is
	77	+	3.11only allowed on the composite tax computation to the extent the electing partner would
	78	+	3.12have been allowed the subtraction.
	79	+	3.13 EFFECTIVE DATE.This section is effective for taxable years beginning after December
	80	+	3.1431, 2021.
	81	+	3.15 Sec. 3. Minnesota Statutes 2022, section 290.01, subdivision 19, is amended to read:
	82	+	3.16 Subd. 19.Net income.(a) For a trust or estate taxable under section 290.03, and a
	83	+	3.17corporation taxable under section 290.02, the term "net income" means the federal taxable
	84	+	3.18income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through
	85	+	3.19the date named in this subdivision, incorporating the federal effective dates of changes to
	86	+	3.20the Internal Revenue Code and any elections made by the taxpayer in accordance with the
	87	+	3.21Internal Revenue Code in determining federal taxable income for federal income tax
	88	+	3.22purposes, and with the modifications provided in sections 290.0131 to 290.0136.
	89	+	3.23 (b) For an individual, the term "net income" means federal adjusted gross income with
	90	+	3.24the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.
	91	+	3.25 (c) In the case of a regulated investment company or a fund thereof, as defined in section
	92	+	3.26851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
	93	+	3.27company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
	94	+	3.28except that:
	95	+	3.29 (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
	96	+	3.30Revenue Code does not apply;
	97	+	3.31 (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue
	98	+	3.32Code must be applied by allowing a deduction for capital gain dividends and exempt-interest
102	99		3Sec. 3.
103		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 4.1 (ii) a resident or nonresident trust that is a shareholder of a qualifying entity that is an
104		-	4.2S corporation.
105		-	4.3 (b) For taxable years beginning after December 31, 2020, in which the taxes of a
106		-	4.4qualifying owner are limited under section 164(b)(6)(B) of the Internal Revenue Code, a
107		-	4.5qualifying entity may elect to file a return and pay the pass-through entity tax imposed under
108		-	4.6paragraph (c). The election:
109		-	4.7 (1) must be made on or before the due date or extended due date of the qualifying entity's
110		-	4.8pass-through entity tax return;
111		-	4.9 (2) may only be made by qualifying owners who collectively hold more than a 50 percent
112		-	4.10ownership interest in the qualifying entity;
113		-	4.11 (3) is binding on all qualifying owners who have an ownership interest in the qualifying
114		-	4.12entity; and
115		-	4.13 (4) once made is irrevocable for the taxable year.
116		-	4.14 (c) Subject to the election in paragraph (b), a pass-through entity tax is imposed on a
117		-	4.15qualifying entity in an amount equal to the sum of the tax liability of each qualifying owner.
118		-	4.16 (d) The amount of a qualifying owner's tax liability under paragraph (c) is the amount
119		-	4.17of the qualifying owner's income multiplied by the highest tax rate for individuals under
120		-	4.18section 290.06, subdivision 2c. When making this determination:
121		-	4.19 (1) nonbusiness deductions, standard deductions, or personal exemptions are not allowed;
122		-	4.20and
123		-	4.21 (2) a credit or deduction is allowed only to the extent allowed to the qualifying owner.
124		-	4.22 (e) The amount of each credit and deduction used to determine a qualifying owner's tax
125		-	4.23liability under paragraph (d) must also be used to determine that qualifying owner's income
126		-	4.24tax liability under chapter 290.
127		-	4.25 (f) This subdivision does not negate the requirement that a qualifying owner pay estimated
128		-	4.26tax if the qualifying owner's tax liability would exceed the requirements set forth in section
129		-	4.27289A.25. The qualifying owner's liability to pay estimated tax on the qualifying owner's
130		-	4.28tax liability as determined under paragraph (d) is, however, satisfied when the qualifying
131		-	4.29entity pays estimated tax in the manner prescribed in section 289A.25 for composite estimated
132		-	4.30tax.
133		-	4Sec. 3.
134		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 5.1 (g) A qualifying owner's adjusted basis in the interest in the qualifying entity, and the
135		-	5.2treatment of distributions, is determined as if the election to pay the pass-through entity tax
136		-	5.3under paragraph (b) is not made.
137		-	5.4 (h) To the extent not inconsistent with this subdivision, for purposes of this chapter, a
138		-	5.5pass-through entity tax return must be treated as a composite return and a qualifying entity
139		-	5.6filing a pass-through entity tax return must be treated as a partnership filing a composite
140		-	5.7return.
141		-	5.8 (i) The provisions of subdivision 17 apply to the election to pay the pass-through entity
142		-	5.9tax under this subdivision.
143		-	5.10 (j) If a nonresident qualifying owner of a qualifying entity making the election to file
144		-	5.11and pay the tax under this subdivision has no other Minnesota source income, filing of the
145		-	5.12pass-through entity tax return is a return for purposes of subdivision 1, provided that the
146		-	5.13nonresident qualifying owner must not have any Minnesota source income other than the
147		-	5.14income from the qualifying entity, other electing qualifying entities, and other partnerships
148		-	5.15electing to file a composite return under subdivision 7. If it is determined that the nonresident
149		-	5.16qualifying owner has other Minnesota source income, the inclusion of the income and tax
150		-	5.17liability for that owner under this provision will not constitute a return to satisfy the
151		-	5.18requirements of subdivision 1. The tax paid for the qualifying owner as part of the
152		-	5.19pass-through entity tax return is allowed as a payment of the tax by the qualifying owner
153		-	5.20on the date on which the pass-through entity tax return payment was made.
154		-	5.21 (k) Once a credit is claimed by a qualifying owner under section 290.06, subdivision
155		-	5.2240, a qualifying entity cannot receive a refund for tax paid under this subdivision for any
156		-	5.23amounts claimed under that section by the qualifying owners. Once a credit is claimed under
157		-	5.24section 290.06, subdivision 40, any refund must be claimed in conjunction with a return
158		-	5.25filed by the qualifying owner.
159		-	5.26 EFFECTIVE DATE.This section is effective retroactively for taxable years beginning
160		-	5.27after December 31, 2020.
161		-	5.28 Sec. 4. Minnesota Statutes 2022, section 290.01, subdivision 19, is amended to read:
162		-	5.29 Subd. 19.Net income.(a) For a trust or estate taxable under section 290.03, and a
163		-	5.30corporation taxable under section 290.02, the term "net income" means the federal taxable
164		-	5.31income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through
165		-	5.32the date named in this subdivision, incorporating the federal effective dates of changes to
166		-	5.33the Internal Revenue Code and any elections made by the taxpayer in accordance with the
167		-	5Sec. 4.
168		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 6.1Internal Revenue Code in determining federal taxable income for federal income tax
169		-	6.2purposes, and with the modifications provided in sections 290.0131 to 290.0136.
170		-	6.3 (b) For an individual, the term "net income" means federal adjusted gross income with
171		-	6.4the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.
172		-	6.5 (c) In the case of a regulated investment company or a fund thereof, as defined in section
173		-	6.6851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
174		-	6.7company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
175		-	6.8except that:
176		-	6.9 (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
177		-	6.10Revenue Code does not apply;
178		-	6.11 (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue
179		-	6.12Code must be applied by allowing a deduction for capital gain dividends and exempt-interest
180		-	6.13dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code;
181		-	6.14and
182		-	6.15 (3) the deduction for dividends paid must also be applied in the amount of any
183		-	6.16undistributed capital gains which the regulated investment company elects to have treated
184		-	6.17as provided in section 852(b)(3)(D) of the Internal Revenue Code.
185		-	6.18 (d) The net income of a real estate investment trust as defined and limited by section
186		-	6.19856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
187		-	6.20taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
188		-	6.21 (e) The net income of a designated settlement fund as defined in section 468B(d) of the
189		-	6.22Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal
190		-	6.23Revenue Code.
191		-	6.24 (f) The Internal Revenue Code of 1986, as amended through December 31, 2018
192		-	6.25December 15, 2022, applies for taxable years beginning after December 31, 1996, except
193		-	6.26the sections of federal law in section 290.0111 shall also apply.
194		-	6.27 (g) Except as otherwise provided, references to the Internal Revenue Code in this
195		-	6.28subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of
196		-	6.29determining net income for the applicable year.
197		-	6.30 EFFECTIVE DATE.This section is effective the day following final enactment, except
198		-	6.31the changes incorporated by federal changes are effective retroactively at the same time the
199		-	6.32changes were effective for federal purposes.
200		-	6Sec. 4.
201		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 7.1 Sec. 5. Minnesota Statutes 2022, section 290.01, subdivision 31, is amended to read:
202		-	7.2 Subd. 31.Internal Revenue Code.Unless specifically defined otherwise, "Internal
203		-	7.3Revenue Code" means the Internal Revenue Code of 1986, as amended through December
204		-	7.431, 2018, except the sections of federal law in section 290.0111 shall also apply December
205		-	7.515, 2022. Internal Revenue Code also includes any uncodified provision in federal law that
206		-	7.6relates to provisions of the Internal Revenue Code that are incorporated into Minnesota law.
207		-	7.7 EFFECTIVE DATE.This section is effective the day following final enactment, except
208		-	7.8the changes incorporated by federal changes are effective retroactively at the same time the
209		-	7.9changes were effective for federal purposes.
210		-	7.10 Sec. 6. Minnesota Statutes 2022, section 290.01, is amended by adding a subdivision to
211		-	7.11read:
212		-	7.12 Subd. 33.Earned income."Earned income" has the meaning given in section 32(c) of
213		-	7.13the Internal Revenue Code, except a taxpayer must use earned income from the taxable year
214		-	7.14for which the taxpayer filed a return.
215		-	7.15 EFFECTIVE DATE.This section is effective the day following final enactment.
216		-	7.16 Sec. 7. Minnesota Statutes 2022, section 290.0123, subdivision 3, is amended to read:
217		-	7.17 Subd. 3.Amount for dependents.For an individual who is a dependent, as defined in
218		-	7.18sections 151 and 152 of the Internal Revenue Code, of another taxpayer for a taxable year
219		-	7.19beginning in the calendar year in which the individual's taxable year begins, the standard
220		-	7.20deduction for that individual is limited to the greater of:
221		-	7.21 (1) $1,100; or
222		-	7.22 (2) the lesser of: (i) the sum of $350 and that individual's earned income, as defined in
223		-	7.23section 32(c) of the Internal Revenue Code; or (ii) the standard deduction amount allowed
224		-	7.24under subdivision 1, clause (3).
225		-	7.25 EFFECTIVE DATE.This section is effective the day following final enactment.
226		-	7.26 Sec. 8. Minnesota Statutes 2022, section 290.0131, is amended by adding a subdivision
227		-	7.27to read:
228		-	7.28 Subd. 19.Disallowed business interest deduction.For any taxable year beginning after
229		-	7.29December 31, 2018, and before January 1, 2021, the amount of business interest deducted
230		-	7.30under the special rule in section 163(j)(10)(A) and (B) of the Internal Revenue Code of
231		-	7.311986, as amended through December 15, 2022, is an addition. Entities that are part of a
232		-	7Sec. 8.
233		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 8.1combined reporting group under the unitary rules in section 290.17, subdivision 4, must
234		-	8.2compute deductions and additions as required under section 290.34, subdivision 5.
235		-	8.3 EFFECTIVE DATE.This section is effective the day following final enactment, except
236		-	8.4the changes incorporated by federal changes are effective retroactively at the same time the
237		-	8.5changes were effective for federal purposes.
238		-	8.6 Sec. 9. Minnesota Statutes 2022, section 290.0131, is amended by adding a subdivision
239		-	8.7to read:
240		-	8.8 Subd. 20.Disallowed net operating loss deduction.(a) The amount of a net operating
241		-	8.9loss arising in any taxable year beginning after December 31, 2017, and before January 1,
242		-	8.102021, and carried back under section 172(b)(1)(D) of the Internal Revenue Code is an
243		-	8.11addition in the taxable year the loss is carried. No addition is required for a net operating
244		-	8.12loss deduction that is a farming loss under section 172(b)(1)(B) of the Internal Revenue
245		-	8.13Code carried to the two years preceding the year the farming loss arose.
246		-	8.14 (b) The amount of a net operating loss deduction in any taxable year beginning after
247		-	8.15December 31, 2017, and before January 1, 2021, that exceeds the deduction allowed under
248		-	8.16section 172(a)(2) of the Internal Revenue Code is an addition. For purposes of this paragraph,
249		-	8.17the deduction allowed under section 172(a)(2) of the Internal Revenue Code is allowed in
250		-	8.18the case of a taxable year beginning after December 31, 2017.
251		-	8.19 (c) The amount of a Minnesota disallowed loss carryover is an addition. For purposes
252		-	8.20of this paragraph, "Minnesota disallowed loss carryover" means, for any taxable year
253		-	8.21beginning after December 31, 2017, and before January 1, 2021, a disallowed loss carryover
254		-	8.22as defined in section 461(l)(2) of the Internal Revenue Code, for a loss that is not allowed
255		-	8.23under section 461(l)(1)(B) of the Internal Revenue Code. For purposes of this paragraph,
256		-	8.24the limitation under section 461(l)(1)(B) of the Internal Revenue Code applies for any
257		-	8.25taxable year beginning after December 31, 2017.
258		-	8.26 (d) For purposes for this subdivision, "Internal Revenue Code" means the Internal
259		-	8.27Revenue Code of 1986, as amended through December 15, 2022.
260		-	8.28 EFFECTIVE DATE.This section is effective the day following final enactment, except
261		-	8.29the changes incorporated by federal changes are effective retroactively at the same time the
262		-	8.30changes were effective for federal purposes.
263		-	8Sec. 9.
264		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 9.1 Sec. 10. Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
265		-	9.2to read:
266		-	9.3 Subd. 31.Delayed business interest.(a) For each taxable year an addition is required
267		-	9.4under section 290.0131, subdivision 19, the amount of the addition, less the sum of all
268		-	9.5amounts subtracted under this paragraph in all prior taxable years, that does not exceed the
269		-	9.6limitation on business interest in section 163(j) of the Internal Revenue Code of 1986, as
270		-	9.7amended through December 15, 2022, notwithstanding the special rule in section 163(j)(10)
271		-	9.8of the Internal Revenue Code, is a subtraction. Any excess is a delayed business interest
272		-	9.9carryforward, the entire amount of which must be carried to the earliest taxable year. No
273		-	9.10subtraction is allowed under this paragraph for taxable years beginning after December 31,
274		-	9.112022.
275		-	9.12 (b) For each of the five taxable years beginning after December 31, 2022, there is allowed
276		-	9.13a subtraction equal to one-fifth of the sum of all carryforward amounts that remain after the
277		-	9.14expiration of paragraph (a).
278		-	9.15 (c) Entities that are part of a combined reporting group under the unitary rules of section
279		-	9.16290.17, subdivision 4, must compute deductions and additions as required under section
280		-	9.17290.34, subdivision 5.
281		-	9.18 EFFECTIVE DATE.Paragraphs (a) and (c) are effective retroactively for taxable years
282		-	9.19beginning after December 31, 2019. Paragraph (b) is effective for taxable years beginning
283		-	9.20after December 31, 2022.
284		-	9.21 Sec. 11. Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
285		-	9.22to read:
286		-	9.23 Subd. 32.Delayed net operating loss deduction.The amount of the sum of each addition
287		-	9.24required in section 290.0131, subdivision 20, for each taxable year, except as otherwise
288		-	9.25provided, less the sum of all amounts subtracted under this subdivision in all prior taxable
289		-	9.26years, that does not exceed 80 percent of federal taxable income as defined in section 290.01,
290		-	9.27subdivision 19, determined without regard to this subdivision, is a subtraction. Any excess
291		-	9.28is a delayed net operating loss deduction carryforward, the entire amount of which must be
292		-	9.29carried to the earliest taxable year. No subtraction under this subdivision is allowed after
293		-	9.3020 taxable years from the taxable year in which an operating loss arises. The sum of the
294		-	9.31additions required under section 290.0131, subdivision 20, paragraph (a), are aggregated
295		-	9.32and assigned to the taxable year immediately succeeding the taxable year in which the
296		-	9.33operating loss arises, for purposes of determining the subtraction allowed under this
297		-	9.34subdivision in that succeeding taxable year and the amount carried forward.
298		-	9Sec. 11.
299		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 10.1 EFFECTIVE DATE.This section is effective retroactively for taxable years beginning
300		-	10.2after December 31, 2018.
301		-	10.3 Sec. 12. Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
302		-	10.4to read:
303		-	10.5 Subd. 33.Excess business losses.The amount of a disallowed loss carryover under
304		-	10.6section 461(l)(1)(B) of the Internal Revenue Code is a subtraction.
305		-	10.7 EFFECTIVE DATE.This section is effective for taxable years beginning after December
306		-	10.831, 2025.
307		-	10.9 Sec. 13. Minnesota Statutes 2022, section 290.0133, is amended by adding a subdivision
308		-	10.10to read:
309		-	10.11 Subd. 15.Disallowed business interest deduction.For any taxable year beginning after
310		-	10.12December 31, 2018, and before January 1, 2021, the amount of business interest deducted
311		-	10.13under the special rule in section 163(j)(10)(A) and (B) of the Internal Revenue Code of
312		-	10.141986, as amended through December 15, 2022, is an addition. Entities that are part of a
313		-	10.15combined reporting group under the unitary rules in section 290.17, subdivision 4, must
314		-	10.16compute deductions and additions as required under section 290.34, subdivision 5.
315		-	10.17 EFFECTIVE DATE.This section is effective the day following final enactment, except
316		-	10.18the changes incorporated by federal changes are effective retroactively at the same time the
317		-	10.19changes were effective for federal purposes.
318		-	10.20Sec. 14. Minnesota Statutes 2022, section 290.0134, is amended by adding a subdivision
319		-	10.21to read:
320		-	10.22 Subd. 20.Delayed business interest.(a) For each taxable year an addition is required
321		-	10.23under section 290.0131, subdivision 19, the amount of the addition, less the sum of all
322		-	10.24amounts subtracted under this paragraph in all prior taxable years, that does not exceed the
323		-	10.25limitation on business interest in section 163(j) of the Internal Revenue Code of 1986, as
324		-	10.26amended through December 15, 2022, notwithstanding the special rule in section 163(j)(10)
325		-	10.27of the Internal Revenue Code, is a subtraction. Any excess is a delayed business interest
326		-	10.28carryforward, the entire amount of which must be carried to the earliest taxable year. No
327		-	10.29subtraction is allowed under this paragraph for taxable years beginning after December 31,
328		-	10.302022.
	100	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 4.1dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code;
	101	+	4.2and
	102	+	4.3 (3) the deduction for dividends paid must also be applied in the amount of any
	103	+	4.4undistributed capital gains which that the regulated investment company elects to have
	104	+	4.5treated as provided in section 852(b)(3)(D) of the Internal Revenue Code.
	105	+	4.6 (d) The net income of a real estate investment trust as defined and limited by section
	106	+	4.7856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
	107	+	4.8taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
	108	+	4.9 (e) The net income of a designated settlement fund as defined in section 468B(d) of the
	109	+	4.10Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal
	110	+	4.11Revenue Code.
	111	+	4.12 (f) The Internal Revenue Code of 1986, as amended through December 31, 2018
	112	+	4.13December 15, 2022, applies for taxable years beginning after December 31, 1996, except
	113	+	4.14the sections of federal law in section 290.0111 shall also apply.
	114	+	4.15 (g) Except as otherwise provided, references to the Internal Revenue Code in this
	115	+	4.16subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of
	116	+	4.17determining net income for the applicable year.
	117	+	4.18 EFFECTIVE DATE.This section is effective the day following final enactment, except
	118	+	4.19the changes incorporated by federal changes are effective retroactively at the same time the
	119	+	4.20changes were effective for federal purposes.
	120	+	4.21 Sec. 4. Minnesota Statutes 2022, section 290.01, subdivision 31, is amended to read:
	121	+	4.22 Subd. 31.Internal Revenue Code.Unless specifically defined otherwise, "Internal
	122	+	4.23Revenue Code" means the Internal Revenue Code of 1986, as amended through December
	123	+	4.2431, 2018, except the sections of federal law in section 290.0111 shall also apply December
	124	+	4.2515, 2022. Internal Revenue Code also includes any uncodified provision in federal law that
	125	+	4.26relates to provisions of the Internal Revenue Code that are incorporated into Minnesota law.
	126	+	4.27 EFFECTIVE DATE.This section is effective the day following final enactment, except
	127	+	4.28the changes incorporated by federal changes are effective retroactively at the same time the
	128	+	4.29changes were effective for federal purposes.
	129	+	4Sec. 4.
	130	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 5.1 Sec. 5. Minnesota Statutes 2022, section 290.01, is amended by adding a subdivision to
	131	+	5.2read:
	132	+	5.3 Subd. 33.Earned income."Earned income" means earned income, as defined in section
	133	+	5.432(c) of the Internal Revenue Code.
	134	+	5.5 EFFECTIVE DATE.This section is effective retroactively for taxable years beginning
	135	+	5.6after December 31, 2017.
	136	+	5.7 Sec. 6. Minnesota Statutes 2022, section 290.0123, subdivision 3, is amended to read:
	137	+	5.8 Subd. 3.Amount for dependents.For an individual who is a dependent, as defined in
	138	+	5.9sections 151 and 152 of the Internal Revenue Code, of another taxpayer for a taxable year
	139	+	5.10beginning in the calendar year in which the individual's taxable year begins, the standard
	140	+	5.11deduction for that individual is limited to the greater of:
	141	+	5.12 (1) $1,100; or
	142	+	5.13 (2) the lesser of (i) the sum of $350 and that individual's earned income, as defined in
	143	+	5.14section 32(c) of the Internal Revenue Code for the taxable year; or (ii) the standard deduction
	144	+	5.15amount allowed under subdivision 1, clause (3).
	145	+	5.16 EFFECTIVE DATE.This section is effective retroactively for taxable years beginning
	146	+	5.17after December 31, 2017.
	147	+	5.18 Sec. 7. Minnesota Statutes 2022, section 290.0131, is amended by adding a subdivision
	148	+	5.19to read:
	149	+	5.20 Subd. 19.Meal expenses.The amount of meal expenses in excess of the 50 percent
	150	+	5.21limitation under section 274(n)(1) of the Internal Revenue Code allowed under subsection
	151	+	5.22(n), paragraph (2), subparagraph (D), of that section is an addition.
	152	+	5.23 EFFECTIVE DATE.This section is effective retroactively for amounts paid or incurred
	153	+	5.24after December 31, 2020.
	154	+	5.25 Sec. 8. Minnesota Statutes 2022, section 290.0132, subdivision 18, is amended to read:
	155	+	5.26 Subd. 18.Net operating losses.(a) The amount of the net operating loss allowed under
	156	+	5.27section 290.095, subdivision 11, paragraph (c), is a subtraction.
	157	+	5.28 (b) The unused portion of a net operating loss carryover under section 290.095,
	158	+	5.29subdivision 11, paragraph (d), is a subtraction. The subtraction is the lesser of:
	159	+	5Sec. 8.
	160	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 6.1 (1) the amount carried into the taxable year minus any subtraction made under this
	161	+	6.2section for prior taxable years; or
	162	+	6.3 (2) 80 percent of Minnesota taxable net income in a single taxable year and determined
	163	+	6.4without regard to this subtraction.
	164	+	6.5 EFFECTIVE DATE.This section is effective for taxable years beginning after December
	165	+	6.631, 2021.
	166	+	6.7 Sec. 9. Minnesota Statutes 2022, section 290.0132, subdivision 24, is amended to read:
	167	+	6.8 Subd. 24.Discharge of indebtedness; education loans.(a) The amount equal to the
	168	+	6.9discharge of indebtedness of a qualified student loan of the taxpayer is a subtraction if:.
	169	+	6.10 (b) For the purposes of this subdivision, "qualified student loan" means:
	170	+	6.11 (1) any loan provided expressly for postsecondary educational expenses, regardless of
	171	+	6.12whether provided through the educational institution or directly to the borrower, if the loan
	172	+	6.13was made, insured, or guaranteed by:
	173	+	6.14 (i) the United States, or an instrumentality or agency thereof;
	174	+	6.15 (ii) a state, territory, or possession of the United States, or the District of Columbia, or
	175	+	6.16any political subdivision thereof; or
	176	+	6.17 (iii) an eligible educational institution, as defined in section 25A(f)(2) of the Internal
	177	+	6.18Revenue Code;
	178	+	6.19 (2) any private education loan, as defined in section 140(a)(7) of the federal Truth in
	179	+	6.20Lending Act;
	180	+	6.21 (3) any loan made by any educational organization described in section 170(b)(1)(A)(ii)
	181	+	6.22of the Internal Revenue Code, if the loan is made:
	182	+	6.23 (i) pursuant to an agreement with any entity described in subitem (A) or any private
	183	+	6.24education lender, as defined in section 140(a) of the Truth in Lending Act, under which the
	184	+	6.25funds from which the loan was made were provided to the educational organization; or
	185	+	6.26 (ii) pursuant to a program of the educational organization that is designed to encourage
	186	+	6.27its students to serve in occupations with unmet needs or in areas with unmet needs and under
	187	+	6.28which the services provided by the students or former students are for or under the direction
	188	+	6.29of a governmental unit or an organization described in section 501(c)(3) of the Internal
	189	+	6.30Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code; or
	190	+	6Sec. 9.
	191	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 7.1 (4) any loan made by an educational organization described in section 170(b)(1)(A)(ii)
	192	+	7.2of the Internal Revenue Code or by an organization exempt from tax under section 501(a)
	193	+	7.3of the Internal Revenue Code to refinance a loan to an individual to assist the individual in
	194	+	7.4attending the educational organization but only if the refinancing loan is pursuant to a
	195	+	7.5program of the refinancing organization that is designed as described in clause (3), item
	196	+	7.6(ii).
	197	+	7.7 (c) A discharge of indebtedness is ineligible for the subtraction under paragraph (a) if
	198	+	7.8the discharge of a loan made by an organization described in paragraph (b), clause (3), or
	199	+	7.9made by a private education lender as defined in section 140(a)(7) of the Truth in Lending
	200	+	7.10Act if the discharge is on account of services performed for either the organization or for
	201	+	7.11the private education lender.
	202	+	7.12 (1) the indebtedness discharged is a qualified education loan; and
	203	+	7.13 (2) the indebtedness was discharged under section 136A.1791, or following the taxpayer's
	204	+	7.14completion of an income-driven repayment plan.
	205	+	7.15 (b) For the purposes of this subdivision, "qualified education loan" has the meaning
	206	+	7.16given in section 221 of the Internal Revenue Code.
	207	+	7.17 (c) For purposes of this subdivision, "income-driven repayment plan" means a payment
	208	+	7.18plan established by the United States Department of Education that sets monthly student
	209	+	7.19loan payments based on income and family size under United States Code, title 20, section
	210	+	7.201087e, or similar authority and specifically includes, but is not limited to:
	211	+	7.21 (d) "Qualified student loan" includes but is not limited to a loan discharged under:
	212	+	7.22 (1) the income-based repayment plan under United States Code, title 20, section 1098e;
	213	+	7.23 (2) the income contingent repayment plan established under United States Code, title
	214	+	7.2420, section 1087e, subsection (e); and
	215	+	7.25 (3) the PAYE program or REPAYE program established by the Department of Education
	216	+	7.26under administrative regulations.; and
	217	+	7.27 (4) section 136A.1791.
	218	+	7.28 EFFECTIVE DATE.This section is effective for taxable years beginning after December
	219	+	7.2931, 2022.
	220	+	7Sec. 9.
	221	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 8.1 Sec. 10. Minnesota Statutes 2022, section 290.0132, subdivision 24, is amended to read:
	222	+	8.2 Subd. 24.Discharge of indebtedness; education loans.(a) The amount equal to the
	223	+	8.3discharge of indebtedness of a qualified student loan of the taxpayer is a subtraction if:.
	224	+	8.4 (b) For the purposes of this subdivision, "qualified student loan" means a loan eligible
	225	+	8.5for the exclusion from gross income under section 9675 of Public Law 117-2, the American
	226	+	8.6Rescue Plan Act, except disregarding the portions of that section limiting the exclusion to
	227	+	8.7discharges after December 31, 2020, and before January 1, 2026.
	228	+	8.8 (1) the indebtedness discharged is a qualified education loan; and
	229	+	8.9 (2) the indebtedness was discharged under section 136A.1791, or following the taxpayer's
	230	+	8.10completion of an income-driven repayment plan.
	231	+	8.11 (b) For the purposes of this subdivision, "qualified education loan" has the meaning
	232	+	8.12given in section 221 of the Internal Revenue Code.
	233	+	8.13 (c) For purposes of this subdivision, "income-driven repayment plan" means a payment
	234	+	8.14plan established by the United States Department of Education that sets monthly student
	235	+	8.15loan payments based on income and family size under United States Code, title 20, section
	236	+	8.161087e, or similar authority and specifically includes, but is not limited to:
	237	+	8.17 (c) "Qualified student loan" includes but is not limited to a loan discharged under:
	238	+	8.18 (1) the income-based repayment plan under United States Code, title 20, section 1098e;
	239	+	8.19 (2) the income contingent repayment plan established under United States Code, title
	240	+	8.2020, section 1087e, subsection (e); and
	241	+	8.21 (3) the PAYE program or REPAYE program established by the Department of Education
	242	+	8.22under administrative regulations.; and
	243	+	8.23 (4) section 136A.1791.
	244	+	8.24 EFFECTIVE DATE.This section is effective for taxable years beginning after December
	245	+	8.2531, 2022.
	246	+	8.26 Sec. 11. Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
	247	+	8.27to read:
	248	+	8.28 Subd. 31.Delayed business interest.For each of the five taxable years beginning after
	249	+	8.29December 31, 2021, there is allowed a subtraction equal to one-fifth of the adjustment
	250	+	8.30amount, to the extent not already deducted, for the exclusion under section 18, subdivision
	251	+	8Sec. 11.
	252	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 9.13, clause (10), due to the Coronavirus Aid, Relief and Economic Security Act, Public Law
	253	+	9.2116-136, section 2306.
	254	+	9.3 EFFECTIVE DATE.This section is effective for taxable years beginning after December
	255	+	9.431, 2021.
	256	+	9.5 Sec. 12. Minnesota Statutes 2022, section 290.0133, is amended by adding a subdivision
	257	+	9.6to read:
	258	+	9.7 Subd. 15.Meal expenses.The amount of meal expenses in excess of the 50 percent
	259	+	9.8limitation under section 274(n)(1) of the Internal Revenue Code allowed under section
	260	+	9.9274(n)(2)(D) of the Internal Revenue Code is an addition.
	261	+	9.10 EFFECTIVE DATE.This section is effective retroactively for amounts paid or incurred
	262	+	9.11after December 31, 2020.
	263	+	9.12 Sec. 13. Minnesota Statutes 2022, section 290.0134, is amended by adding a subdivision
	264	+	9.13to read:
	265	+	9.14 Subd. 20.Delayed business interest.For each of the five taxable years beginning after
	266	+	9.15December 31, 2021, there is allowed a subtraction equal to one-fifth of the adjustment
	267	+	9.16amount, to the extent not already deducted, for the exclusion under section 18, subdivision
	268	+	9.173, clause (10), due to the Coronavirus Aid, Relief and Economic Security Act, Public Law
	269	+	9.18116-136, section 2306.
	270	+	9.19 EFFECTIVE DATE.This section is effective for taxable years beginning after December
	271	+	9.2031, 2021.
	272	+	9.21 Sec. 14. Minnesota Statutes 2022, section 290.06, subdivision 2c, is amended to read:
	273	+	9.22 Subd. 2c.Schedules of rates for individuals, estates, and trusts.(a) The income taxes
	274	+	9.23imposed by this chapter upon married individuals filing joint returns and surviving spouses
	275	+	9.24as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
	276	+	9.25their taxable net income the following schedule of rates:
	277	+	9.26 (1) On the first $38,770, 5.35 percent;
	278	+	9.27 (2) On all over $38,770, but not over $154,020, 6.8 percent;
	279	+	9.28 (3) On all over $154,020, but not over $269,010, 7.85 percent;
	280	+	9.29 (4) On all over $269,010, 9.85 percent.
	281	+	9Sec. 14.
	282	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 10.1 Married individuals filing separate returns, estates, and trusts must compute their income
	283	+	10.2tax by applying the above rates to their taxable income, except that the income brackets
	284	+	10.3will be one-half of the above amounts after the adjustment required in subdivision 2d.
	285	+	10.4 (b) The income taxes imposed by this chapter upon unmarried individuals must be
	286	+	10.5computed by applying to taxable net income the following schedule of rates:
	287	+	10.6 (1) On the first $26,520, 5.35 percent;
	288	+	10.7 (2) On all over $26,520, but not over $87,110, 6.8 percent;
	289	+	10.8 (3) On all over $87,110, but not over $161,720, 7.85 percent;
	290	+	10.9 (4) On all over $161,720, 9.85 percent.
	291	+	10.10 (c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
	292	+	10.11a head of household as defined in section 2(b) of the Internal Revenue Code must be
	293	+	10.12computed by applying to taxable net income the following schedule of rates:
	294	+	10.13 (1) On the first $32,650, 5.35 percent;
	295	+	10.14 (2) On all over $32,650, but not over $131,190, 6.8 percent;
	296	+	10.15 (3) On all over $131,190, but not over $214,980, 7.85 percent;
	297	+	10.16 (4) On all over $214,980, 9.85 percent.
	298	+	10.17 (d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
	299	+	10.18of any individual taxpayer whose taxable net income for the taxable year is less than an
	300	+	10.19amount determined by the commissioner must be computed in accordance with tables
	301	+	10.20prepared and issued by the commissioner of revenue based on income brackets of not more
	302	+	10.21than $100. The amount of tax for each bracket shall be computed at the rates set forth in
	303	+	10.22this subdivision, provided that the commissioner may disregard a fractional part of a dollar
	304	+	10.23unless it amounts to 50 cents or more, in which case it may be increased to $1.
	305	+	10.24 (e) An individual who is not a Minnesota resident for the entire year must compute the
	306	+	10.25individual's Minnesota income tax as provided in this subdivision. After the application of
	307	+	10.26the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
	308	+	10.27by a fraction in which:
	309	+	10.28 (1) the numerator is the individual's Minnesota source federal adjusted gross income as
	310	+	10.29defined in section 62 of the Internal Revenue Code and increased by:
	311	+	10.30 (i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
	312	+	10.3117, and 19, and 290.0137, paragraph (a); and reduced by
329	313		10Sec. 14.
330		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 11.1 (b) For each of the five taxable years beginning after December 31, 2022, there is allowed
331		-	11.2a subtraction equal to one-fifth of the sum of all carryforward amounts that remain after the
332		-	11.3expiration of paragraph (a).
333		-	11.4 (c) Entities that are part of a combined reporting group under the unitary rules of section
334		-	11.5290.17, subdivision 4, must compute deductions and additions as required under section
335		-	11.6290.34, subdivision 5.
336		-	11.7 EFFECTIVE DATE.Paragraphs (a) and (c) are effective retroactively for taxable years
337		-	11.8beginning after December 31, 2019. Paragraph (b) is effective for taxable years beginning
338		-	11.9after December 31, 2022.
339		-	11.10Sec. 15. Minnesota Statutes 2022, section 290.06, subdivision 2c, is amended to read:
340		-	11.11 Subd. 2c.Schedules of rates for individuals, estates, and trusts.(a) The income taxes
341		-	11.12imposed by this chapter upon married individuals filing joint returns and surviving spouses
342		-	11.13as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
343		-	11.14their taxable net income the following schedule of rates:
344		-	11.15 (1) On the first $38,770, 5.35 percent;
345		-	11.16 (2) On all over $38,770, but not over $154,020, 6.8 percent;
346		-	11.17 (3) On all over $154,020, but not over $269,010, 7.85 percent;
347		-	11.18 (4) On all over $269,010, 9.85 percent.
348		-	11.19 Married individuals filing separate returns, estates, and trusts must compute their income
349		-	11.20tax by applying the above rates to their taxable income, except that the income brackets
350		-	11.21will be one-half of the above amounts after the adjustment required in subdivision 2d.
351		-	11.22 (b) The income taxes imposed by this chapter upon unmarried individuals must be
352		-	11.23computed by applying to taxable net income the following schedule of rates:
353		-	11.24 (1) On the first $26,520, 5.35 percent;
354		-	11.25 (2) On all over $26,520, but not over $87,110, 6.8 percent;
355		-	11.26 (3) On all over $87,110, but not over $161,720, 7.85 percent;
356		-	11.27 (4) On all over $161,720, 9.85 percent.
357		-	11.28 (c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
358		-	11.29a head of household as defined in section 2(b) of the Internal Revenue Code must be
359		-	11.30computed by applying to taxable net income the following schedule of rates:
	314	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 11.1 (ii) the Minnesota assignable portion of the subtraction for United States government
	315	+	11.2interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
	316	+	11.3subdivisions 9, 10, 14, 15, 17, 18, and 27, and 31, and 290.0137, paragraph (c), after applying
	317	+	11.4the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
	318	+	11.5 (2) the denominator is the individual's federal adjusted gross income as defined in section
	319	+	11.662 of the Internal Revenue Code, increased by:
	320	+	11.7 (i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
	321	+	11.817, and 19, and 290.0137, paragraph (a); and reduced by
	322	+	11.9 (ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, and
	323	+	11.1027, and 31, and 290.0137, paragraph (c).
	324	+	11.11 (f) If an individual who is not a Minnesota resident for the entire year is a qualifying
	325	+	11.12owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
	326	+	11.137a, paragraph (b), the individual must compute the individual's Minnesota income tax as
	327	+	11.14provided in paragraph (e), and also must include, to the extent attributed to the electing
	328	+	11.15qualifying entity:
	329	+	11.16 (1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
	330	+	11.17addition under section 290.0131, subdivision 5; and
	331	+	11.18 (2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
	332	+	11.19subtraction under section 290.0132, subdivision 3.
	333	+	11.20 EFFECTIVE DATE.This section is effective for taxable years beginning after December
	334	+	11.2131, 2021.
	335	+	11.22Sec. 15. Minnesota Statutes 2022, section 290.0671, subdivision 1a, is amended to read:
	336	+	11.23 Subd. 1a.Definitions.For purposes of this section, the following terms "qualifying
	337	+	11.24child," and "earned income," have the meanings given in section 32(c) of the Internal
	338	+	11.25Revenue Code, and the term "adjusted gross income" has the meaning given in section 62
	339	+	11.26of the Internal Revenue Code.:
	340	+	11.27 "Earned income of the lesser-earning spouse" has the meaning given in section 290.0675,
	341	+	11.28subdivision 1, paragraph (d).
	342	+	11.29 (1) "qualifying child" has the meaning given in section 32(c)(3) of the Internal Revenue
	343	+	11.30Code; and
	344	+	11.31 (2) "earned income of the lesser earning spouse" has the meaning given in section
	345	+	11.32290.0675, subdivision 1, paragraph (d).
360	346		11Sec. 15.
361		-	~~S0025-1 1st Engrossment~~~~SF25~~ REVISOR EAP 12.1 ~~(1) On the first $32,650, 5.35 percent;~~
362		-	12.~~2 (2) On all over $32,650~~, ~~but not over $131,190, 6~~.~~8 percent;~~
363		-	12.3 ~~(3) On all over $131,190~~, ~~but not over $214,980~~, ~~7.85 percent;~~
364		-	12.4 (4) ~~On all over $214,980, 9.85 percent.~~
365		-	12.~~5 (d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax~~
366		-	12.~~6of any individual taxpayer whose taxable net~~ income ~~for~~ the ~~taxable year is less than an~~
367		-	12.~~7amount determined by the commissioner must be computed in accordance with tables~~
368		-	12.~~8prepared and issued by~~ the ~~commissioner~~ of revenue ~~based on income brackets of not more~~
369		-	12.~~9than $100.~~ The ~~amount of tax for each bracket shall be computed at the rates set forth in~~
370		-	12.~~10this subdivision,~~ ~~provided that the commissioner may disregard~~ a ~~fractional part of a dollar~~
371		-	12.~~11unless it amounts to 50 cents or more, in which case it may be increased to $1.~~
372		-	12.12 (e) ~~An individual who is not a Minnesota resident for~~ the ~~entire year must compute the~~
373		-	12.~~13individual's Minnesota~~ income ~~tax~~ as ~~provided~~ in ~~this~~ subdivision. ~~After the application of~~
374		-	12.~~14the nonrefundable credits provided in this chapter,~~ the ~~tax liability must then be multiplied~~
375		-	12.~~15by a fraction~~ in ~~which:~~
376		-	12.~~16 (1)~~ the ~~numerator is~~ the ~~individual's Minnesota source federal adjusted gross income as~~
377		-	12.~~17defined in section 62 of the Internal Revenue Code and increased by:~~
378		-	12.18 ~~(i) the additions required under sections 290.0131, subdivisions 2,~~ ~~6, 8 to 10, 16, and~~
379		-	12.~~1917~~, ~~19, and 20, and 290~~.~~0137, paragraph (a); and reduced by~~
380		-	12.~~20 (ii) the~~ Minnesota ~~assignable portion of the subtraction for United States government~~
381		-	12.~~21interest under~~ section ~~290.0132, subdivision 2~~, the ~~subtractions under sections 290.0132,~~
382		-	12.~~22subdivisions 9,~~ ~~10, 14,~~ ~~15, 17, 18, and 27, 31, and 32, and 290~~.~~0137, paragraph (c), after~~
383		-	12.~~23applying the allocation and assignability provisions of section 290.081, clause~~ (a)~~, or 290.17;~~
384		-	12.~~24and~~
385		-	12.25 (2) the ~~denominator is the individual~~'s federal ~~adjusted gross~~ income as defined in section
386		-	12.~~2662~~ of the Internal Revenue Code~~, increased by:~~
387		-	12.27 (i) the ~~additions required under sections 290.0131, subdivisions 2,~~ ~~6, 8 to 10, 16, and~~
388		-	12.~~2817~~, ~~19, and 20, and 290.0137, paragraph (a); and reduced by~~
389		-	12.29 (ii) the ~~subtractions~~ under ~~sections 290.0132, subdivisions 2,~~ ~~9, 10,~~ ~~14, 15, 17, 18, and~~
390		-	12.~~3027, 31, and 32, and 290.0137, paragraph~~ (c).
391		-	12.~~31 (f) If an individual who is not a Minnesota resident for the entire year is a qualifying~~
392		-	~~12.32owner of a qualifying entity that elects to pay tax~~ as ~~provided in section 289A~~.08, ~~subdivision~~
393		-	12~~Sec. 15.~~
394		-	~~S0025-1 1st EngrossmentSF25 REVISOR EAP~~ 13.~~17a, paragraph~~ (b), the ~~individual must compute the individual's Minnesota income tax as~~
395		-	13.~~2provided~~ in ~~paragraph (e), and also must include, to~~ the ~~extent attributed to the electing~~
396		-	13.~~3qualifying entity:~~
397		-	13.~~4 (1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i),~~ the
398		-	13.~~5addition under section 290.0131, subdivision 5;~~ ~~and~~
399		-	13.~~6 (2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii),~~ the
400		-	13.~~7subtraction under section 290.0132~~, ~~subdivision 3.~~
401		-	13.~~8 EFFECTIVE DATE.This~~ section ~~is effective retroactively for taxable years beginning~~
402		-	13.~~9after December 31,~~ ~~2017.~~
403		-	13.~~10Sec. 16. Minnesota Statutes 2022, section 290.0671, subdivision 1a, is amended~~ to ~~read:~~
404		-	13.~~11 Subd.~~ ~~1a.Definitions.For purposes of this~~ section, ~~the terms term "qualifying child,"~~
405		-	13.~~12and "earned income," have has~~ the ~~meanings meaning given in~~ section ~~32(c) of the Internal~~
406		-	13.~~13Revenue Code, and the term "adjusted gross income" has the meaning given in section 62~~
407		-	13.~~14of~~ the Internal Revenue Code.
408		-	13.~~15 "Earned~~ ~~income of~~ the ~~lesser-earning spouse"~~ ~~has the meaning given in section 290.0675,~~
409		-	13.~~16subdivision 1~~, ~~paragraph (d).~~
410		-	13.~~17 EFFECTIVE DATE.This~~ section ~~is effective~~ the ~~day following final enactment.~~
411		-	13.~~18Sec. 17. Minnesota Statutes 2022, section 290.0675, subdivision 1, is amended to read:~~
412		-	13.~~19 Subdivision 1.Definitions.(a) For purposes~~ of ~~this section~~ the following ~~terms have~~
413		-	13.~~20the meanings given~~.
414		-	13.21 (b) ~~"Earned income" means the sum~~ of ~~the following~~, ~~to the extent included in Minnesota~~
415		-	13.~~22taxable~~ income:
416		-	13.23 (1) ~~earned income as defined in section 32(c)(2)~~ of the ~~Internal Revenue Code 290.01,~~
417		-	13.~~24subdivision 33;~~
418		-	13.25 (2) ~~income received from a retirement pension,~~ ~~profit-sharing, stock bonus,~~ ~~or annuity~~
419		-	13.~~26plan~~; ~~and~~
420		-	13.27 (3) ~~Social Security benefits~~ as ~~defined in section 86(d)(1) of the Internal Revenue Code.~~
421		-	13.~~28 (c) "Taxable income" means net income as defined in section~~ 290.01, ~~subdivision 19.~~
422		-	13.29 (d) ~~"Earned income of lesser-earning spouse" means~~ the ~~earned income~~ of the ~~spouse~~
423		-	13.~~30with the lesser amount of earned income as defined in paragraph~~ (b) ~~for the taxable year~~
	347	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 12.1 EFFECTIVE DATE.This section is effective retroactively for taxable years beginning
	348	+	12.2after December 31, 2017.
	349	+	12.3 Sec. 16. Minnesota Statutes 2022, section 290.0675, subdivision 1, is amended to read:
	350	+	12.4 Subdivision 1.Definitions.(a) For purposes of this section the following terms have
	351	+	12.5the meanings given.
	352	+	12.6 (b) "Earned income" means the sum of the following, to the extent included in Minnesota
	353	+	12.7taxable income:
	354	+	12.8 (1) the taxpayer's earned income as defined in section 32(c)(2) of the Internal Revenue
	355	+	12.9Code for the taxable year;
	356	+	12.10 (2) income received from a retirement pension, profit-sharing, stock bonus, or annuity
	357	+	12.11plan; and
	358	+	12.12 (3) Social Security benefits as defined in section 86(d)(1) of the Internal Revenue Code.
	359	+	12.13 (c) "Taxable income" means net income as defined in section 290.01, subdivision 19.
	360	+	12.14 (d) "Earned income of lesser-earning spouse" means the earned income of the spouse
	361	+	12.15with the lesser amount of earned income as defined in paragraph (b) for the taxable year
	362	+	12.16minus one-half the amount of the standard deduction under section 290.0123, subdivision
	363	+	12.171, clause (1).
	364	+	12.18 EFFECTIVE DATE.This section is effective retroactively for taxable years beginning
	365	+	12.19after December 31, 2017.
	366	+	12.20Sec. 17. Minnesota Statutes 2022, section 290.091, subdivision 2, is amended to read:
	367	+	12.21 Subd. 2.Definitions.For purposes of the tax imposed by this section, the following
	368	+	12.22terms have the meanings given.
	369	+	12.23 (a) "Alternative minimum taxable income" means the sum of the following for the taxable
	370	+	12.24year:
	371	+	12.25 (1) the taxpayer's federal alternative minimum taxable income as defined in section
	372	+	12.2655(b)(2) of the Internal Revenue Code;
	373	+	12.27 (2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
	374	+	12.28taxable income, but excluding:
	375	+	12.29 (i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
	376	+	12.30 (ii) the medical expense deduction;
	377	+	12Sec. 17.
	378	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 13.1 (iii) the casualty, theft, and disaster loss deduction; and
	379	+	13.2 (iv) the impairment-related work expenses of a person with a disability;
	380	+	13.3 (3) for depletion allowances computed under section 613A(c) of the Internal Revenue
	381	+	13.4Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
	382	+	13.5to the extent not included in federal alternative minimum taxable income, the excess of the
	383	+	13.6deduction for depletion allowable under section 611 of the Internal Revenue Code for the
	384	+	13.7taxable year over the adjusted basis of the property at the end of the taxable year (determined
	385	+	13.8without regard to the depletion deduction for the taxable year);
	386	+	13.9 (4) to the extent not included in federal alternative minimum taxable income, the amount
	387	+	13.10of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
	388	+	13.11Code determined without regard to subparagraph (E);
	389	+	13.12 (5) to the extent not included in federal alternative minimum taxable income, the amount
	390	+	13.13of interest income as provided by section 290.0131, subdivision 2;
	391	+	13.14 (6) the amount of addition required by section 290.0131, subdivisions 9, 10, and 16, and
	392	+	13.1519;
	393	+	13.16 (7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent
	394	+	13.17not included in the addition required under clause (6); and
	395	+	13.18 (8) to the extent not included in federal alternative minimum taxable income, the amount
	396	+	13.19of foreign-derived intangible income deducted under section 250 of the Internal Revenue
	397	+	13.20Code;
	398	+	13.21 less the sum of the amounts determined under the following:
	399	+	13.22 (i) interest income as defined in section 290.0132, subdivision 2;
	400	+	13.23 (ii) an overpayment of state income tax as provided by section 290.0132, subdivision
	401	+	13.243, to the extent included in federal alternative minimum taxable income;
	402	+	13.25 (iii) the amount of investment interest paid or accrued within the taxable year on
	403	+	13.26indebtedness to the extent that the amount does not exceed net investment income, as defined
	404	+	13.27in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
	405	+	13.28in computing federal adjusted gross income;
	406	+	13.29 (iv) amounts subtracted from federal taxable or adjusted gross income as provided by
	407	+	13.30section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, and 26 to 29 33;
	408	+	13.31 (v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
	409	+	13.32paragraph paragraphs (c) and (d); and
424	410		13Sec. 17.
425		-	~~S0025-1 1st Engrossment~~~~SF25~~ REVISOR EAP 14.~~1minus one-half~~ the amount ~~of the standard~~ deduction under section 290.~~0123~~, ~~subdivision~~
426		-	14.~~21, clause (1)~~.
427		-	14.3 ~~EFFECTIVE DATE.This section is effective~~ the ~~day following final enactment.~~
428		-	14.~~4 Sec.~~ ~~18. Minnesota Statutes 2022,~~ section ~~290.091~~, ~~subdivision 2,~~ ~~is amended to read:~~
429		-	14.~~5 Subd.~~ ~~2.Definitions.For purposes of~~ the ~~tax imposed by this~~ section, ~~the following~~
430		-	14.~~6terms have the meanings given.~~
431		-	14.~~7 (a) "Alternative~~ ~~minimum taxable income" means the sum of the following for the taxable~~
432		-	14.~~8year:~~
433		-	14.9 (1) the ~~taxpayer's federal alternative minimum taxable income as defined in section~~
434		-	14.~~1055(b~~)~~(2) 55(b)(1)(D)~~ of the ~~Internal Revenue Code;~~
435		-	14.~~11 (2) the taxpayer's itemized deductions allowed in computing federal alternative minimum~~
436		-	14.~~12taxable~~ income~~, but excluding:~~
437		-	14.~~13 (i)~~ the ~~charitable contribution deduction~~ under ~~section 170 of the Internal Revenue Code;~~
438		-	14.14 ~~(ii) the medical expense deduction;~~
439		-	14.~~15 (iii) the casualty~~, ~~theft, and disaster loss deduction; and~~
440		-	14.~~16 (iv) the impairment-related~~ ~~work expenses of a person with a disability;~~
441		-	14.17 (3) ~~for depletion allowances computed under section 613A(c) of the Internal Revenue~~
442		-	14.~~18Code~~, ~~with respect to each property (as~~ ~~defined in section 614~~ of ~~the Internal Revenue Code),~~
443		-	14.~~19to~~ the ~~extent not included~~ in ~~federal alternative minimum taxable income,~~ the ~~excess~~ of ~~the~~
444		-	14.~~20deduction for depletion allowable under section 611 of the Internal Revenue Code for the~~
445		-	14.~~21taxable year over~~ the ~~adjusted basis~~ of the ~~property at the end of the taxable year (determined~~
446		-	14.~~22without regard to the depletion deduction for the taxable year);~~
447		-	14.23 (4) ~~to the extent not included in federal alternative minimum taxable~~ income~~, the amount~~
448		-	14.~~24of the tax preference for intangible drilling cost~~ under section ~~57(a)(2) of the Internal Revenue~~
449		-	14.~~25Code determined without regard to subparagraph~~ (E);
450		-	14.~~26 (5)~~ to the ~~extent not included in federal alternative minimum taxable income, the amount~~
451		-	14.~~27of interest income as provided by section 290.0131, subdivision 2;~~
452		-	14.~~28 (6)~~ the ~~amount of addition required by section 290.0131, subdivisions 9, 10, and 16, 19,~~
453		-	14.~~29and 20;~~
454		-	14.~~30 (7) the deduction allowed under section 199A~~ of ~~the Internal Revenue Code~~, to ~~the extent~~
455		-	14.~~31not included~~ in the ~~addition required under clause (6); and~~
	411	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 14.1 (vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
	412	+	14.2subdivision 7.
	413	+	14.3 In the case of an estate or trust, alternative minimum taxable income must be computed
	414	+	14.4as provided in section 59(c) of the Internal Revenue Code, except alternative minimum
	415	+	14.5taxable income must be increased by the addition in section 290.0131, subdivision 16.
	416	+	14.6 (b) "Investment interest" means investment interest as defined in section 163(d)(3) of
	417	+	14.7the Internal Revenue Code.
	418	+	14.8 (c) "Net minimum tax" means the minimum tax imposed by this section.
	419	+	14.9 (d) "Regular tax" means the tax that would be imposed under this chapter (without regard
	420	+	14.10to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
	421	+	14.11under this chapter.
	422	+	14.12 (e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
	423	+	14.13after subtracting the exemption amount determined under subdivision 3.
	424	+	14.14 EFFECTIVE DATE.This section is effective for taxable years beginning after December
	425	+	14.1531, 2021.
	426	+	14.16Sec. 18. Minnesota Statutes 2022, section 290.095, subdivision 11, is amended to read:
	427	+	14.17 Subd. 11.Carryback or carryover adjustments.(a) Except as provided in paragraph
	428	+	14.18(c), for individuals, estates, and trusts the amount of a net operating loss that may be carried
	429	+	14.19back or carried over shall be the same dollar amount allowable in the determination of
	430	+	14.20federal taxable income, provided that, notwithstanding any other provision, estates and
	431	+	14.21trusts must apply the following adjustments to the amount of the net operating loss that may
	432	+	14.22be carried back or carried over:
	433	+	14.23 (1) Nonassignable income or losses as required by section 290.17.
	434	+	14.24 (2) Deductions not allocable to Minnesota under section 290.17.
	435	+	14.25 (b) The net operating loss carryback or carryover applied as a deduction in the taxable
	436	+	14.26year to which the net operating loss is carried back or carried over shall be equal to the net
	437	+	14.27operating loss carryback or carryover applied in the taxable year in arriving at federal taxable
	438	+	14.28income provided that trusts and estates must apply the following modifications:
	439	+	14.29 (1) Increase the amount of carryback or carryover applied in the taxable year by the
	440	+	14.30amount of losses and interest, taxes and other expenses not assignable or allowable to
	441	+	14.31Minnesota incurred in the taxable year.
456	442		14Sec. 18.
457		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 15.1 (8) to the extent not included in federal alternative minimum taxable income, the amount
458		-	15.2of foreign-derived intangible income deducted under section 250 of the Internal Revenue
459		-	15.3Code;
460		-	15.4 less the sum of the amounts determined under the following:
461		-	15.5 (i) interest income as defined in section 290.0132, subdivision 2;
462		-	15.6 (ii) an overpayment of state income tax as provided by section 290.0132, subdivision
463		-	15.73, to the extent included in federal alternative minimum taxable income;
464		-	15.8 (iii) the amount of investment interest paid or accrued within the taxable year on
465		-	15.9indebtedness to the extent that the amount does not exceed net investment income, as defined
466		-	15.10in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
467		-	15.11in computing federal adjusted gross income;
468		-	15.12 (iv) amounts subtracted from federal taxable or adjusted gross income as provided by
469		-	15.13section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, and 26 to 29, 31, and 32;
470		-	15.14 (v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
471		-	15.15paragraph (c); and
472		-	15.16 (vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
473		-	15.17subdivision 7.
474		-	15.18 In the case of an estate or trust, alternative minimum taxable income must be computed
475		-	15.19as provided in section 59(c) of the Internal Revenue Code, except alternative minimum
476		-	15.20taxable income must be increased by the addition in section 290.0131, subdivision 16.
477		-	15.21 (b) "Investment interest" means investment interest as defined in section 163(d)(3) of
478		-	15.22the Internal Revenue Code.
479		-	15.23 (c) "Net minimum tax" means the minimum tax imposed by this section.
480		-	15.24 (d) "Regular tax" means the tax that would be imposed under this chapter (without regard
481		-	15.25to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
482		-	15.26under this chapter.
483		-	15.27 (e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
484		-	15.28after subtracting the exemption amount determined under subdivision 3.
485		-	15.29 EFFECTIVE DATE.(a) The changes in paragraph (a), clause (1), are effective at the
486		-	15.30same time the changes in section 10101(a)(4)(A) of Public Law 117-169 are effective for
487		-	15.31federal purposes.
	443	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 15.1 (2) Decrease the amount of carryback or carryover applied in the taxable year by the
	444	+	15.2amount of income not assignable to Minnesota earned in the taxable year. For estates and
	445	+	15.3trusts, the net operating loss carryback or carryover to the next consecutive taxable year
	446	+	15.4shall be the net operating loss carryback or carryover as calculated in clause (b) less the
	447	+	15.5amount applied in the earlier taxable year(s). No additional net operating loss carryback or
	448	+	15.6carryover shall be allowed to estates and trusts if the entire amount has been used to offset
	449	+	15.7Minnesota income in a year earlier than was possible on the federal return. However, if a
	450	+	15.8net operating loss carryback or carryover was allowed to offset federal income in a year
	451	+	15.9earlier than was possible on the Minnesota return, an estate or trust shall still be allowed to
	452	+	15.10offset Minnesota income but only if the loss was assignable to Minnesota in the year the
	453	+	15.11loss occurred.
	454	+	15.12 (c) This paragraph does not apply to eligible small businesses that make a valid election
	455	+	15.13to carry back their losses for federal purposes under section 172(b)(1)(H) of the Internal
	456	+	15.14Revenue Code as amended through March 31, 2009.
	457	+	15.15 (1) A net operating loss of an individual, estate, or trust that is allowed under this
	458	+	15.16subdivision and for which the taxpayer elects to carry back for more than two years under
	459	+	15.17section 172(b)(1)(H) of the Internal Revenue Code is a net operating loss carryback to each
	460	+	15.18of the two taxable years preceding the loss, and unused portions may be carried forward for
	461	+	15.1920 taxable years after the loss.
	462	+	15.20 (2) The entire amount of the net operating loss for any taxable year must be carried to
	463	+	15.21the earliest of the taxable years to which the loss may be carried. The portion of the loss
	464	+	15.22which that may be carried to each of the other taxable years is the excess, if any, of the
	465	+	15.23amount of the loss over the greater of the taxable net income or alternative minimum taxable
	466	+	15.24income for each of the taxable years to which the loss may be carried.
	467	+	15.25 (d) For net operating loss carryovers or carrybacks arising in taxable years beginning
	468	+	15.26after December 31, 2017, and before January 1, 2021, a net operating loss carryover or
	469	+	15.27carryback is allowed as provided in the Internal Revenue Code as amended through December
	470	+	15.2831, 2018, as follows:
	471	+	15.29 (1) the entire amount of the net operating loss, to the extent not already deducted, must
	472	+	15.30be carried to the earliest taxable year and any unused portion may be carried forward for
	473	+	15.3120 taxable years after the loss; and
	474	+	15.32 (2) the portion of the loss that may be carried to each of the other taxable years is the
	475	+	15.33excess, if any, of the amount of the loss over the greater of the taxable net income or
488	476		15Sec. 18.
489		-	~~S0025-1 1st Engrossment~~~~SF25~~ REVISOR EAP 16.~~1 (b) All other changes are effective retroactively~~ for taxable years ~~beginning after~~
490		-	16.~~2December 31, 2017~~.
491		-	16.3 ~~Sec~~. ~~19. Minnesota Statutes 2022,~~ section ~~290.095, subdivision 11,~~ is ~~amended to read:~~
492		-	16.~~4 Subd~~. ~~11.Carryback or carryover adjustments.(a) Except as provided in paragraph~~
493		-	16.~~5paragraphs (c) and (d)~~, ~~for individuals~~, ~~estates~~, ~~and trusts the amount of a net operating loss~~
494		-	16.~~6that may be carried back or carried over shall be~~ the ~~same dollar amount allowable in the~~
495		-	16.~~7determination~~ of ~~federal taxable income~~, ~~provided that~~, ~~notwithstanding any other provision,~~
496		-	16.~~8estates and trusts must apply the following adjustments to the amount of the net operating~~
497		-	16.~~9loss that may be carried back or carried over:~~
498		-	16.~~10 (1) Nonassignable income or losses as required by~~ section ~~290~~.~~17.~~
499		-	16.11 ~~(2) Deductions not allocable to Minnesota under section 290.17.~~
500		-	16.~~12 (b)~~ The ~~net operating loss carryback or carryover applied as a deduction in the taxable~~
501		-	16.~~13year~~ to ~~which~~ the ~~net operating loss is carried back or carried over shall be equal to the net~~
502		-	16.~~14operating loss carryback or carryover applied in the taxable year in arriving at federal taxable~~
503		-	16.~~15income provided that trusts and estates must apply~~ the ~~following modifications:~~
504		-	16.~~16 (1) Increase~~ the ~~amount of carryback or carryover applied in the taxable year by the~~
505		-	16.~~17amount~~ of ~~losses and~~ interest~~, taxes and other expenses not assignable or allowable to~~
506		-	16.~~18Minnesota incurred in the taxable year~~.
507		-	16.~~19 (2) Decrease the amount of carryback or carryover applied in the taxable year by the~~
508		-	16.~~20amount~~ of ~~income not assignable to Minnesota earned in the taxable year. For estates and~~
509		-	16.~~21trusts~~, ~~the net operating loss carryback or carryover to the next consecutive taxable year~~
510		-	16.~~22shall be~~ the ~~net operating loss carryback or carryover as calculated in clause~~ (b) ~~less the~~
511		-	16.~~23amount applied~~ in the ~~earlier taxable year(s). No additional net operating loss carryback or~~
512		-	16.~~24carryover shall be allowed to estates~~ and ~~trusts if~~ the ~~entire amount has been used to offset~~
513		-	16.~~25Minnesota income~~ in ~~a year earlier than~~ was ~~possible on the~~ federal ~~return. However, if a~~
514		-	16.~~26net operating loss carryback or carryover was allowed to offset federal income in a year~~
515		-	16.~~27earlier than was possible on~~ the ~~Minnesota return,~~ ~~an estate or trust shall still be allowed to~~
516		-	16.~~28offset Minnesota income but only if the loss was assignable to Minnesota~~ in ~~the year the~~
517		-	16.~~29loss occurred.~~
518		-	16.~~30 (c) This paragraph does not apply~~ to ~~eligible small businesses that make a valid election~~
519		-	16.~~31to carry back their losses for federal purposes under section 172(b)(1)(H) of the Internal~~
520		-	16.~~32Revenue Code as amended through March 31, 2009~~.
521		-	16~~Sec~~. ~~19.~~
522		-	~~S0025-1 1st EngrossmentSF25 REVISOR EAP~~ 17.~~1 (1)~~ A ~~net operating loss of an individual, estate, or trust that is allowed under this~~
523		-	17.~~2subdivision~~ and ~~for which~~ the ~~taxpayer elects to carry back for more than two years under~~
524		-	17.~~3section 172(b)(1)(H) of~~ the ~~Internal Revenue Code is a net operating loss carryback to each~~
525		-	17.~~4of~~ the ~~two taxable years preceding the loss, and unused portions may be carried forward for~~
526		-	17.~~520 taxable years after~~ the ~~loss~~.
527		-	17.~~6 (2) The entire amount~~ of ~~the net operating loss for any taxable year must be carried to~~
528		-	17.~~7the earliest~~ of ~~the taxable years~~ to ~~which the loss may be carried. The portion of the loss~~
529		-	17.~~8which may be carried to each of~~ the ~~other taxable years~~ is ~~the excess, if any, of the amount~~
530		-	17.~~9of~~ the ~~loss over the greater of the taxable net income~~ or ~~alternative minimum taxable income~~
531		-	17.~~10for each~~ of the ~~taxable years to which the loss may be carried.~~
532		-	17.~~11 (d)~~ The ~~amount of a net operating loss carried forward must be reduced by any amounts~~
533		-	17.~~12used for the subtraction in section 290.0132, subdivision 33, in the next taxable year~~
534		-	17.~~13following~~ the ~~subtraction in which a net operating loss deduction is claimed.~~
535		-	17.~~14 EFFECTIVE DATE.This section~~ is ~~effective for taxable years beginning after December~~
536		-	17.~~1531~~, ~~2025.~~
537		-	17.~~16Sec. 20.~~ ~~Minnesota Statutes 2022~~, ~~section 290A.03, subdivision 15,~~ is ~~amended to read:~~
538		-	17.~~17 Subd.~~ ~~15.Internal Revenue Code."Internal Revenue Code" means~~ the ~~Internal Revenue~~
539		-	17.~~18Code of 1986~~, ~~as amended through December 31,~~ ~~2018 December 15,~~ ~~2022.~~
540		-	17.~~19 EFFECTIVE DATE.This section is effective retroactively beginning with refunds~~
541		-	17.~~20based on rent paid~~ in ~~2021 and property taxes payable in 2022~~.
542		-	17.~~21Sec. 21.~~ ~~Minnesota Statutes 2022,~~ ~~section 291.005, subdivision 1,~~ ~~is amended to read:~~
543		-	17.~~22 Subdivision 1.Scope.Unless~~ the ~~context otherwise clearly requires, the following terms~~
544		-	17.~~23used in this chapter shall have~~ the ~~following meanings:~~
545		-	17.~~24 (1) "Commissioner" means~~ the ~~commissioner of revenue~~ or ~~any person to whom~~ the
546		-	17.~~25commissioner has delegated functions under this chapter.~~
547		-	17.~~26 (2) "Federal gross estate" means~~ the ~~gross estate of a~~ decedent ~~as required~~ to ~~be valued~~
548		-	17.~~27and otherwise determined for federal estate tax purposes under~~ the ~~Internal Revenue Code,~~
549		-	17.~~28increased by~~ the ~~value of any property in which the decedent had a qualifying income interest~~
550		-	17.~~29for life and for which~~ an ~~election was made~~ under section ~~291.03, subdivision 1d,~~ ~~for~~
551		-	17.~~30Minnesota estate tax purposes, but was not made for federal estate tax purposes.~~
552		-	17~~Sec. 21.~~
553		-	~~S0025-1 1st Engrossment~~~~SF25 REVISOR EAP 18.1 (3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986,~~
554		-	18.~~2as amended through December 31~~, ~~2018 December 15, 2022.~~
555		-	18.~~3 (4) "Minnesota~~ ~~gross estate"~~ ~~means the~~ federal ~~gross estate of a decedent after (a)~~
556		-	18.~~4excluding therefrom any property included in the estate which has its situs outside Minnesota,~~
557		-	18.~~5and~~ (b) ~~including any~~ property ~~omitted from~~ the federal gross estate ~~which is includable in~~
558		-	18.~~6the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.~~
559		-	18.7 (5) ~~"Nonresident decedent" means~~ an ~~individual~~ whose ~~domicile at the time of death~~
560		-	18.~~8was not in Minnesota.~~
561		-	18.~~9 (6) "Personal representative" means~~ the ~~executor~~, ~~administrator or other person appointed~~
562		-	18.~~10by~~ the ~~court to administer and dispose of the property of the decedent. If there is no executor,~~
563		-	18.~~11administrator or other person appointed,~~ ~~qualified, and acting within this state,~~ ~~then any~~
564		-	18.~~12person in actual or constructive possession of any property having a situs in this state which~~
565		-	18.~~13is included in the federal gross estate of the decedent shall be deemed to be a personal~~
566		-	18.~~14representative~~ to ~~the extent of the property and the Minnesota estate tax due with respect~~
567		-	18.~~15to~~ the ~~property.~~
568		-	18.~~16 (7) "Resident~~ ~~decedent" means an individual whose domicile at the time of death was~~
569		-	18.~~17in Minnesota.~~ The ~~provisions~~ of ~~section 290.01~~, ~~subdivision 7, paragraphs (c) and (d), apply~~
570		-	18.~~18to determinations~~ of ~~domicile under this chapter.~~
571		-	18.~~19 (8) "Situs of property" means~~, ~~with respect to~~:
572		-	18.20 (i) ~~real property~~, ~~the state or country in which it is located;~~
573		-	18.~~21 (ii) tangible personal property~~, ~~the state or country in which it was normally kept or~~
574		-	18.~~22located at the time~~ of ~~the decedent's death or for a gift of tangible personal property within~~
575		-	18.~~23three years of death~~, ~~the state or country in which it was normally kept or located when the~~
576		-	18.~~24gift was executed;~~
577		-	18.~~25 (iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue~~
578		-	18.~~26Code~~, ~~owned by a nonresident decedent and that is normally kept or located in this state~~
579		-	18.~~27because it is on loan to an organization, qualifying as exempt from taxation under section~~
580		-	18.~~28501~~(~~c)(3~~) ~~of the Internal Revenue Code~~, ~~that is located in Minnesota~~, ~~the situs of the art is~~
581		-	18.~~29deemed to be outside~~ of ~~Minnesota, notwithstanding~~ the ~~provisions of item (ii)~~; ~~and~~
582		-	18.30 (iv) ~~intangible personal property~~, ~~the state or country in which the decedent was domiciled~~
583		-	18.~~31at death or for a gift~~ of ~~intangible personal property within three years of death, the state or~~
584		-	18.~~32country in which the decedent was domiciled when the gift was executed.~~
	477	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 16.1alternative minimum taxable income for each of the taxable years to which the loss may be
	478	+	16.2carried.
	479	+	16.3 EFFECTIVE DATE.This section is effective retroactively for losses arising in taxable
	480	+	16.4years beginning after December 31, 2017, and before January 1, 2021.
	481	+	16.5 Sec. 19. Minnesota Statutes 2022, section 290A.03, subdivision 15, is amended to read:
	482	+	16.6 Subd. 15.Internal Revenue Code."Internal Revenue Code" means the Internal Revenue
	483	+	16.7Code of 1986, as amended through December 31, 2018 December 15, 2022.
	484	+	16.8 EFFECTIVE DATE.This section is effective for property tax refunds based on property
	485	+	16.9taxes payable in 2023 and rent paid in 2022 and thereafter.
	486	+	16.10Sec. 20. Minnesota Statutes 2022, section 291.005, subdivision 1, is amended to read:
	487	+	16.11 Subdivision 1.Scope.Unless the context otherwise clearly requires, the following terms
	488	+	16.12used in this chapter shall have the following meanings:
	489	+	16.13 (1) "Commissioner" means the commissioner of revenue or any person to whom the
	490	+	16.14commissioner has delegated functions under this chapter.
	491	+	16.15 (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
	492	+	16.16and otherwise determined for federal estate tax purposes under the Internal Revenue Code,
	493	+	16.17increased by the value of any property in which the decedent had a qualifying income interest
	494	+	16.18for life and for which an election was made under section 291.03, subdivision 1d, for
	495	+	16.19Minnesota estate tax purposes, but was not made for federal estate tax purposes.
	496	+	16.20 (3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986,
	497	+	16.21as amended through December 31, 2018 March 15, 2022.
	498	+	16.22 (4) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
	499	+	16.23excluding therefrom any property included in the estate which that has its situs outside
	500	+	16.24Minnesota, and (b) including any property omitted from the federal gross estate which that
	501	+	16.25is includable in the estate, has its situs in Minnesota, and was not disclosed to federal taxing
	502	+	16.26authorities.
	503	+	16.27 (5) "Nonresident decedent" means an individual whose domicile at the time of death
	504	+	16.28was not in Minnesota.
	505	+	16.29 (6) "Personal representative" means the executor, administrator or other person appointed
	506	+	16.30by the court to administer and dispose of the property of the decedent. If there is no executor,
	507	+	16.31administrator or other person appointed, qualified, and acting within this state, then any
	508	+	16Sec. 20.
	509	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 17.1person in actual or constructive possession of any property having a situs in this state which
	510	+	17.2that is included in the federal gross estate of the decedent shall be deemed to be a personal
	511	+	17.3representative to the extent of the property and the Minnesota estate tax due with respect
	512	+	17.4to the property.
	513	+	17.5 (7) "Resident decedent" means an individual whose domicile at the time of death was
	514	+	17.6in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply
	515	+	17.7to determinations of domicile under this chapter.
	516	+	17.8 (8) "Situs of property" means, with respect to:
	517	+	17.9 (i) real property, the state or country in which it is located;
	518	+	17.10 (ii) tangible personal property, the state or country in which it was normally kept or
	519	+	17.11located at the time of the decedent's death or for a gift of tangible personal property within
	520	+	17.12three years of death, the state or country in which it was normally kept or located when the
	521	+	17.13gift was executed;
	522	+	17.14 (iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue
	523	+	17.15Code, owned by a nonresident decedent and that is normally kept or located in this state
	524	+	17.16because it is on loan to an organization, qualifying as exempt from taxation under section
	525	+	17.17501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is
	526	+	17.18deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and
	527	+	17.19 (iv) intangible personal property, the state or country in which the decedent was domiciled
	528	+	17.20at death or for a gift of intangible personal property within three years of death, the state or
	529	+	17.21country in which the decedent was domiciled when the gift was executed.
	530	+	17.22 For a nonresident decedent with an ownership interest in a pass-through entity with
	531	+	17.23assets that include real or tangible personal property, situs of the real or tangible personal
	532	+	17.24property, including qualified works of art, is determined as if the pass-through entity does
	533	+	17.25not exist and the real or tangible personal property is personally owned by the decedent. If
	534	+	17.26the pass-through entity is owned by a person or persons in addition to the decedent, ownership
	535	+	17.27of the property is attributed to the decedent in proportion to the decedent's capital ownership
	536	+	17.28share of the pass-through entity.
	537	+	17.29 (9) "Pass-through entity" includes the following:
	538	+	17.30 (i) an entity electing S corporation status under section 1362 of the Internal Revenue
	539	+	17.31Code;
	540	+	17.32 (ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
	541	+	17Sec. 20.
	542	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 18.1 (iii) a single-member limited liability company or similar entity, regardless of whether
	543	+	18.2it is taxed as an association or is disregarded for federal income tax purposes under Code
	544	+	18.3of Federal Regulations, title 26, section 301.7701-3; or
	545	+	18.4 (iv) a trust to the extent the property is includable in the decedent's federal gross estate;
	546	+	18.5but excludes
	547	+	18.6 (v) an entity whose ownership interest securities are traded on an exchange regulated
	548	+	18.7by the Securities and Exchange Commission as a national securities exchange under section
	549	+	18.86 of the Securities Exchange Act, United States Code, title 15, section 78f.
	550	+	18.9 EFFECTIVE DATE.This section is effective the day following final enactment, except
	551	+	18.10the changes incorporated by federal changes are effective retroactively at the same time the
	552	+	18.11changes were effective for federal purposes.
	553	+	18.12Sec. 21. LIMITATION ON RETROACTIVITY.
	554	+	18.13 (a) The definitions in Minnesota Statutes, section 290.01, apply to this section.
	555	+	18.14 (b) Notwithstanding any law to the contrary, for a taxable year beginning before January
	556	+	18.151, 2022, a taxpayer's liability for tax under Minnesota Statutes, chapters 289A and 290,
	557	+	18.16must not change as a result of this act's adoption of the following sections of federal law,
	558	+	18.17which are incorporated as part of the Internal Revenue Code, as amended through December
	559	+	18.1815, 2022:
	560	+	18.19 (1) Taxpayer Certainty and Disaster Tax Relief Act of 2019, Public Law 116-94, section
	561	+	18.20104, deduction of qualified tuition and related expenses;
	562	+	18.21 (2) Taxpayer Certainty and Disaster Tax Relief Act of 2019, Public Law 116-94, section
	563	+	18.22203, employee retention credit for employers affected by qualified disasters;
	564	+	18.23 (3) Families First Coronavirus Response Act, Public Law 116-127, section 7001, payroll
	565	+	18.24credit for required paid sick leave;
	566	+	18.25 (4) Families First Coronavirus Response Act, Public Law 116-127, section 7003, payroll
	567	+	18.26credit for required paid family leave;
	568	+	18.27 (5) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
	569	+	18.282204, allowance of partial above the line deduction for charitable contributions;
	570	+	18.29 (6) for individuals, Coronavirus Aid, Relief and Economic Security Act, Public Law
	571	+	18.30116-136, section 2205(a), modification of limitations on charitable contributions during
	572	+	18.312020;
585	573		18Sec. 21.
586		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 19.1 For a nonresident decedent with an ownership interest in a pass-through entity with
587		-	19.2assets that include real or tangible personal property, situs of the real or tangible personal
588		-	19.3property, including qualified works of art, is determined as if the pass-through entity does
589		-	19.4not exist and the real or tangible personal property is personally owned by the decedent. If
590		-	19.5the pass-through entity is owned by a person or persons in addition to the decedent, ownership
591		-	19.6of the property is attributed to the decedent in proportion to the decedent's capital ownership
592		-	19.7share of the pass-through entity.
593		-	19.8 (9) "Pass-through entity" includes the following:
594		-	19.9 (i) an entity electing S corporation status under section 1362 of the Internal Revenue
595		-	19.10Code;
596		-	19.11 (ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
597		-	19.12 (iii) a single-member limited liability company or similar entity, regardless of whether
598		-	19.13it is taxed as an association or is disregarded for federal income tax purposes under Code
599		-	19.14of Federal Regulations, title 26, section 301.7701-3; or
600		-	19.15 (iv) a trust to the extent the property is includable in the decedent's federal gross estate;
601		-	19.16but excludes
602		-	19.17 (v) an entity whose ownership interest securities are traded on an exchange regulated
603		-	19.18by the Securities and Exchange Commission as a national securities exchange under section
604		-	19.196 of the Securities Exchange Act, United States Code, title 15, section 78f.
605		-	19.20 EFFECTIVE DATE.This section is effective the day following final enactment, except
606		-	19.21the changes incorporated by federal changes are effective retroactively at the same time the
607		-	19.22changes were effective for federal purposes.
608		-	19.23Sec. 22. TEMPORARY ADDITIONS AND SUBTRACTIONS; INDIVIDUALS,
609		-	19.24ESTATES, AND TRUSTS.
610		-	19.25 (a) For the purposes of this section:
611		-	19.26 (1) "subtraction" has the meaning given in Minnesota Statutes, section 290.0132,
612		-	19.27subdivision 1, and the rules in that subdivision apply to this section;
613		-	19.28 (2) "addition" has the meaning given in Minnesota Statutes, section 290.0131, subdivision
614		-	19.291, and the rules in that subdivision apply to this section; and
615		-	19.30 (3) the definitions in Minnesota Statutes, section 290.01, apply to this section.
616		-	19.31 (b) The following amounts are subtractions:
617		-	19Sec. 22.
618		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 20.1 (1) the amount of wages used for the calculation of the employee retention credit for
619		-	20.2employers affected by qualified disasters, to the extent not deducted from income, under
620		-	20.3Public Law 116-94, division Q, section 203, or Public Law 116-260, division EE, section
621		-	20.4303;
622		-	20.5 (2) the amount of wages used for the calculation of the payroll credit for required paid
623		-	20.6sick leave, to the extent not deducted from income, under Public Law 116-127, section
624		-	20.77001, as amended by section 9641 of Public Law 117-2;
625		-	20.8 (3) the amount of wages or expenses used for the calculation of the payroll credit for
626		-	20.9required paid family leave, to the extent not deducted from income, under Public Law
627		-	20.10116-127, section 7003, as amended by section 9641 of Public Law 117-2;
628		-	20.11 (4) the amount of wages used for the calculation of the employee retention credit for
629		-	20.12employers subject to closure due to COVID-19, to the extent not deducted from income,
630		-	20.13under Public Law 116-136, section 2301, as amended by Public Law 116-260, division EE,
631		-	20.14section 207, and Public Law 117-2, section 9651; and
632		-	20.15 (5) the amount required to be added to gross income to claim the credit in section 6432
633		-	20.16of the Internal Revenue Code.
634		-	20.17 (c) The following amounts are additions:
635		-	20.18 (1) the amount subtracted for qualified tuition expenses under section 222 of the Internal
636		-	20.19Revenue Code, as amended by Public Law 116-94, division Q, section 104;
637		-	20.20 (2) the amount of above the line charitable contributions deducted under section 2204
638		-	20.21of Public Law 116-136;
639		-	20.22 (3) the amount of meal expenses in excess of the 50 percent limitation under section
640		-	20.23274(n)(1) of the Internal Revenue Code allowed under subsection (n), paragraph (2),
641		-	20.24subparagraph (D), of that section; and
642		-	20.25 (4) the amount of charitable contributions deducted from federal taxable income by a
643		-	20.26trust for taxable year 2020 under Public Law 116-136, section 2205(a).
644		-	20.27 (d) For the purpose of calculating property tax refunds under Minnesota Statutes, chapter
645		-	20.28290A, any amounts allowed as a subtraction in paragraph (b) are excluded from "income,"
646		-	20.29as defined in Minnesota Statutes, section 290A.03, subdivision 3.
647		-	20.30 EFFECTIVE DATE.(a) Paragraphs (a) to (c) are effective retroactively at the same
648		-	20.31time the changes were effective for federal purposes.
649		-	20Sec. 22.
650		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 21.1 (b) Paragraph (d) is effective retroactively beginning with refunds based on rent paid in
651		-	21.22021 and property taxes payable in 2022.
652		-	21.3 Sec. 23. TEMPORARY ADDITIONS AND SUBTRACTIONS; CORPORATIONS.
653		-	21.4 (a) For the purposes of this section:
654		-	21.5 (1) "subtraction" has the meaning given in Minnesota Statutes, section 290.0134,
655		-	21.6subdivision 1, and the rules in that subdivision apply to this section;
656		-	21.7 (2) "addition" has the meaning given in Minnesota Statutes, section 290.0133, subdivision
657		-	21.81, and the rules in that subdivision apply to this section; and
658		-	21.9 (3) the definitions in Minnesota Statutes, section 290.01, apply to this section.
659		-	21.10 (b) The following amounts are subtractions:
660		-	21.11 (1) the amount of wages used for the calculation of the employee retention credit for
661		-	21.12employers affected by qualified disasters, to the extent not deducted from income, under
662		-	21.13Public Law 116-94, division Q, section 203, or Public Law 116-260, division EE, section
663		-	21.14303;
664		-	21.15 (2) the amount of wages used for the calculation of the payroll credit for required paid
665		-	21.16sick leave, to the extent not deducted from income, under Public Law 116-127, section
666		-	21.177001, as amended by section 9641 of Public Law 117-2;
667		-	21.18 (3) the amount of wages or expenses used for the calculation of the payroll credit for
668		-	21.19required paid family leave, to the extent not deducted from income, under Public Law
669		-	21.20116-127, section 7003, as amended by section 9641 of Public Law 117-2;
670		-	21.21 (4) the amount of wages used for the calculation of the employee retention credit for
671		-	21.22employers subject to closure due to COVID-19, to the extent not deducted from income,
672		-	21.23under Public Law 116-136, section 2301, as amended by Public Law 116-260, division EE,
673		-	21.24section 207, and Public Law 117-2, section 9651; and
674		-	21.25 (5) the amount required to be added to gross income to claim the credit in section 6432
675		-	21.26of the Internal Revenue Code.
676		-	21.27 (c) The following amounts are additions:
677		-	21.28 (1) the amount of meal expenses in excess of the 50 percent limitation under section
678		-	21.29274(n)(1) of the Internal Revenue Code allowed under subsection (n), paragraph (2),
679		-	21.30subparagraph (D), of that section; and
680		-	21Sec. 23.
681		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 22.1 (2) the amount of charitable contributions deducted for taxable year 2020 pursuant to
682		-	22.2the provisions of Public Law 116-136, section 2205(a).
683		-	22.3 EFFECTIVE DATE.This section is effective retroactively at the same time the changes
684		-	22.4were effective for federal purposes.
685		-	22.5 Sec. 24. CHARITABLE CONTRIBUTION DEDUCTION; SPECIAL RULE FOR
686		-	22.62020.
687		-	22.7 For charitable contribution deductions under Minnesota Statutes, section 290.0122, for
688		-	22.8taxable year 2020, the provisions of Public Law 116-136, section 2205(a), do not apply.
689		-	22.9 EFFECTIVE DATE.This section is effective retroactively at the same time the changes
690		-	22.10were effective for federal purposes.
691		-	22.11Sec. 25. DEPENDENT CARE CREDIT; SPECIAL RULE FOR 2021.
692		-	22.12 For the purpose of calculating the dependent care credit under Minnesota Statutes, section
693		-	22.13290.067, for taxable year 2021, the provisions of Public Law 117-2, sections 9631 and 9632,
694		-	22.14do not apply.
695		-	22.15 EFFECTIVE DATE.This section is effective retroactively at the same time the changes
696		-	22.16were effective for federal purposes.
697		-	22.17Sec. 26. CASUALTY LOSS DEDUCTION; SPECIAL RULE FOR 2021.
698		-	22.18 For the purpose of calculating the standard deduction under Minnesota Statutes, section
699		-	22.19290.0123, and the casualty loss deduction under Minnesota Statutes, section 290.0122,
700		-	22.20subdivision 8, the following provisions do not apply:
701		-	22.21 (1) section 204(b) of the Taxpayer Certainty and Disaster Tax Relief Act of 2019, Public
702		-	22.22Law 116-94; and
703		-	22.23 (2) section 304(b) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, Public
704		-	22.24Law 116-260.
705		-	22.25 EFFECTIVE DATE.This section is effective retroactively at the same time the changes
706		-	22.26were effective for federal purposes.
707		-	22Sec. 26.
708		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 23.1 Sec. 27. WORKING FAMILY CREDIT; SPECIAL RULE FOR TAX YEAR 2021.
709		-	23.2 For the purpose of calculating the working family credit under Minnesota Statutes,
710		-	23.3section 290.0671, for taxable year 2021, the provisions of section 32(n) of the Internal
711		-	23.4Revenue Code do not apply.
712		-	23.5 EFFECTIVE DATE.This section is effective retroactively at the same time the changes
713		-	23.6were effective for federal purposes.
714		-	23.7 Sec. 28. EXTENSION OF STATUTE OF LIMITATIONS.
715		-	23.8 (a) Notwithstanding any law to the contrary, a taxpayer whose tax liability changes as
716		-	23.9a result of this act may file an amended return for up to six months after the final enactment
717		-	23.10date of this act. The commissioner may review and assess the return of a taxpayer covered
718		-	23.11by this provision for the later of:
719		-	23.12 (1) the periods under Minnesota Statutes, sections 289A.38; 289.39, subdivision 3; and
720		-	23.13289A.40; or
721		-	23.14 (2) one year from the time the amended return is filed as a result of a change in tax
722		-	23.15liability under this section.
723		-	23.16 (b) Interest on any additional liabilities as a result of any provision in this act shall run
724		-	23.17beginning six months after the final enactment date.
725		-	23.18 EFFECTIVE DATE.This section is effective retroactively at the same time the changes
726		-	23.19incorporated in this act were effective for federal purposes.
727		-	23.20Sec. 29. PROPERTY TAX REFUNDS; CORONAVIRUS-RELATED RETIREMENT
728		-	23.21DISTRIBUTIONS.
729		-	23.22 For the purpose of calculating property tax refunds under Minnesota Statutes, chapter
730		-	23.23290A, "income" does not include coronavirus-related distributions included in gross income
731		-	23.24under section 2202(a)(5) of Public Law 116-136.
732		-	23.25 EFFECTIVE DATE.This section is effective retroactively beginning with refunds
733		-	23.26based on rent paid in 2021 and property taxes payable in 2022.
734		-	23.27Sec. 30. REPEALER.
735		-	23.28 Minnesota Statutes 2022, section 290.0111, is repealed.
736		-	23.29 EFFECTIVE DATE.This section is effective the day following final enactment.
737		-	23Sec. 30.
738		-	S0025-1 1st EngrossmentSF25 REVISOR EAP 290.0111 TEMPORARY CONFORMITY TO CERTAIN FEDERAL TAX CHANGES.
739		-	Subdivision 1.Adopting Internal Revenue Code changes.For the purposes of this chapter,
740		-	"Internal Revenue Code," as defined in section 290.01, subdivisions 19 and 31, includes the sections
741		-	of federal law specified in this section as enacted or amended through March 31, 2021.
742		-	Subd. 2.Further Consolidated Appropriations Act, 2020.(a) "Internal Revenue Code"
743		-	includes the following provisions of the Taxpayer Certainty and Disaster Tax Relief Act of 2019
744		-	in Public Law 116-94:
745		-	(1) section 101;
746		-	(2) section 116;
747		-	(3) section 117;
748		-	(4) section 130;
749		-	(5) section 131;
750		-	(6) section 132;
751		-	(7) section 144;
752		-	(8) section 201;
753		-	(9) section 202; and
754		-	(10) section 204.
755		-	(b) "Internal Revenue Code" includes section 301 of the Setting Every Community Up for
756		-	Retirement Enhancement Act of 2019 in Public Law 116-94.
757		-	Subd. 3.CARES Act."Internal Revenue Code" includes the following sections of Public Law
758		-	116-136:
759		-	(1) section 1106(i); and
760		-	(2) section 2202.
761		-	Subd. 4.Consolidated Appropriations Act, 2021.(a) "Internal Revenue Code" includes the
762		-	following provisions of the COVID-related Tax Relief Act of 2020 in Public Law 116-260:
763		-	(1) section 275;
764		-	(2) section 276; and
765		-	(3) section 277.
766		-	(b) For taxable years beginning after December 31, 2019, and before January 1, 2021, "Internal
767		-	Revenue Code" includes sections 278(b) and 278(c) of the COVID-related Tax Relief Act of 2020
768		-	in Public Law 116-260.
769		-	Subd. 5.American Rescue Plan Act."Internal Revenue Code" includes section 9042 of Public
770		-	Law 117-2.
771		-	1R
772		-	APPENDIX
773		-	Repealed Minnesota Statutes: S0025-1
	574	+	23-01509 as introduced12/28/22 REVISOR EAP/HL 19.1 (7) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
	575	+	19.22301, employee retention credit for employers subject to closure due to COVID-19;
	576	+	19.3 (8) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
	577	+	19.42303, modifications for net operating losses;
	578	+	19.5 (9) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
	579	+	19.62304, modification of limitation on losses for taxpayers other than corporations;
	580	+	19.7 (10) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
	581	+	19.82306, limitation on business interest;
	582	+	19.9 (11) Taxpayer Certainty and Disaster Tax Relief Act of 2020, Public Law 116-260,
	583	+	19.10section 207, extension and modification of employee retention and rehiring credit;
	584	+	19.11 (12) Taxpayer Certainty and Disaster Tax Relief Act of 2020, Public Law 116-260,
	585	+	19.12section 210, temporary allowance of full deduction for business meals;
	586	+	19.13 (13) Taxpayer Certainty and Disaster Tax Relief Act of 2020, Public Law 116-260,
	587	+	19.14section 303, employee retention credit for employers affected by qualified disasters;
	588	+	19.15 (14) American Rescue Plan Act, Public Law 117-2, section 9501(b), preserving health
	589	+	19.16benefits for workers;
	590	+	19.17 (15) American Rescue Plan Act, Public Law 117-2, section 9631, refundability and
	591	+	19.18enhancement of child and dependent care tax credit;
	592	+	19.19 (16) American Rescue Plan Act, Public Law 117-2, section 9641, payroll sick and family
	593	+	19.20leave credits; and
	594	+	19.21 (17) American Rescue Plan Act, Public Law 117-2, section 9651, extension of employee
	595	+	19.22retention credit.
	596	+	19.23 EFFECTIVE DATE.This section is effective the day following final enactment, except
	597	+	19.24the limitation on retroactivity for federal changes is effective retroactively at the same time
	598	+	19.25the changes were effective for federal purposes.
	599	+	19Sec. 21.
	600	+	23-01509 as introduced12/28/22 REVISOR EAP/HL