1.1 A bill for an act
1.2 relating to taxation; property tax refunds; increasing maximum refunds and
1.3 expanding eligibility for refunds; expanding the exemption amount for senior
1.4 claimants and claimants with a disability; amending Minnesota Statutes 2022,
1.5 sections 290A.03, subdivision 3; 290A.04, subdivisions 2, 4.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2022, section 290A.03, subdivision 3, is amended to read:
1.8 Subd. 3.Income.(a) "Income" means the sum of the following:
1.9 (1) federal adjusted gross income as defined in the Internal Revenue Code; and
1.10 (2) the sum of the following amounts to the extent not included in clause (1):
1.11 (i) all nontaxable income;
1.12 (ii) the amount of a passive activity loss that is not disallowed as a result of section 469,
1.13paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss
1.14carryover allowed under section 469(b) of the Internal Revenue Code;
1.15 (iii) an amount equal to the total of any discharge of qualified farm indebtedness of a
1.16solvent individual excluded from gross income under section 108(g) of the Internal Revenue
1.17Code;
1.18 (iv) cash public assistance and relief;
1.19 (v) any pension or annuity (including railroad retirement benefits, all payments received
1.20under the federal Social Security Act, Supplemental Security Income, and veterans benefits),
1.21which was not exclusively funded by the claimant or spouse, or which was funded exclusively
1Section 1.
23-01242 as introduced12/28/22 REVISOR EAP/BM
SENATE
STATE OF MINNESOTA
S.F. No. 271NINETY-THIRD SESSION
(SENATE AUTHORS: KLEIN, Nelson, Gustafson, Rest and Dziedzic)
OFFICIAL STATUSD-PGDATE
Introduction and first reading01/12/2023
Referred to Taxes 2.1by the claimant or spouse and which funding payments were excluded from federal adjusted
2.2gross income in the years when the payments were made;
2.3 (vi) interest received from the federal or a state government or any instrumentality or
2.4political subdivision thereof;
2.5 (vii) workers' compensation;
2.6 (viii) nontaxable strike benefits;
2.7 (ix) the gross amounts of payments received in the nature of disability income or sick
2.8pay as a result of accident, sickness, or other disability, whether funded through insurance
2.9or otherwise;
2.10 (x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
2.111986, as amended through December 31, 1995;
2.12 (xi) contributions made by the claimant to an individual retirement account, including
2.13a qualified voluntary employee contribution; simplified employee pension plan;
2.14self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of
2.15the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal
2.16Revenue Code, to the extent the sum of amounts exceeds the retirement base amount for
2.17the claimant and spouse;
2.18 (xii) to the extent not included in federal adjusted gross income, distributions received
2.19by the claimant or spouse from a traditional or Roth style retirement account or plan;
2.20 (xiii) nontaxable scholarship or fellowship grants;
2.21 (xiv) alimony received to the extent not included in the recipient's income;
2.22 (xv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue
2.23Code;
2.24 (xvi) the amount deducted for tuition expenses under section 222 of the Internal Revenue
2.25Code; and
2.26 (xvii) the amount deducted for certain expenses of elementary and secondary school
2.27teachers under section 62(a)(2)(D) of the Internal Revenue Code.
2.28 In the case of an individual who files an income tax return on a fiscal year basis, the
2.29term "federal adjusted gross income" shall mean federal adjusted gross income reflected in
2.30the fiscal year ending in the calendar year. Federal adjusted gross income shall not be reduced
2.31by the amount of a net operating loss carryback or carryforward or a capital loss carryback
2.32or carryforward allowed for the year.
2Section 1.
23-01242 as introduced12/28/22 REVISOR EAP/BM 3.1 (b) "Income" does not include:
3.2 (1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
3.3 (2) amounts of any pension or annuity which was exclusively funded by the claimant
3.4or spouse and which funding payments were not excluded from federal adjusted gross
3.5income in the years when the payments were made;
3.6 (3) to the extent included in federal adjusted gross income, amounts contributed by the
3.7claimant or spouse to a traditional or Roth style retirement account or plan, but not to exceed
3.8the retirement base amount reduced by the amount of contributions excluded from federal
3.9adjusted gross income, but not less than zero;
3.10 (4) surplus food or other relief in kind supplied by a governmental agency;
3.11 (5) relief granted under this chapter;
3.12 (6) child support payments received under a temporary or final decree of dissolution or
3.13legal separation;
3.14 (7) restitution payments received by eligible individuals and excludable interest as
3.15defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001,
3.16Public Law 107-16;
3.17 (8) alimony paid; or
3.18 (9) veterans disability compensation paid under title 38 of the United States Code.
3.19 (c) The sum of the following amounts may be subtracted from income:
3.20 (1) for the claimant's first dependent, the exemption amount multiplied by 1.4;
3.21 (2) for the claimant's second dependent, the exemption amount multiplied by 1.3;
3.22 (3) for the claimant's third dependent, the exemption amount multiplied by 1.2;
3.23 (4) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
3.24 (5) for the claimant's fifth dependent, the exemption amount; and
3.25 (6) if the claimant or claimant's spouse had a disability or attained the age of 65 on or
3.26before December 31 of the year for which the taxes were levied or rent paid, the exemption
3.27amount multiplied by 1.5.
3.28 (d) For purposes of this subdivision, the following terms have the meanings given:
3.29 (1) "exemption amount" means the exemption amount under section 290.0121,
3.30subdivision 1, paragraph (b), for the taxable year for which the income is reported;
3Section 1.
23-01242 as introduced12/28/22 REVISOR EAP/BM 4.1 (2) "retirement base amount" means the deductible amount for the taxable year for the
4.2claimant and spouse under section 219(b)(5)(A) of the Internal Revenue Code, adjusted for
4.3inflation as provided in section 219(b)(5)(C) of the Internal Revenue Code, without regard
4.4to whether the claimant or spouse claimed a deduction; and
4.5 (3) "traditional or Roth style retirement account or plan" means retirement plans under
4.6sections 401, 403, 408, 408A, and 457 of the Internal Revenue Code.
4.7 EFFECTIVE DATE.This section is effective beginning with claims based on rent paid
4.8in 2023 and property taxes payable in 2024.
4.9 Sec. 2. Minnesota Statutes 2022, section 290A.04, subdivision 2, is amended to read:
4.10 Subd. 2.Homeowners; homestead credit refund.A claimant whose property taxes
4.11payable are in excess of the percentage of the household income stated below shall pay an
4.12amount equal to the percent of income shown for the appropriate household income level
4.13along with the percent to be paid by the claimant of the remaining amount of property taxes
4.14payable. The state refund equals the amount of property taxes payable that remain, up to
4.15the state refund amount shown below.
4.16 Maximum
State
Refund
4.17 Percent Paid by
ClaimantPercent of Income4.18 Household Income
2,770
3,560$15 percent1.0 percent
4.19 $0 to 1,739
4.20 $0 to $1,920
2,770
3,560$15 percent1.1 percent
4.21 1,740 to 3,459
4.22 $1,921 to $3,820
2,770
3,560$15 percent1.2 percent
4.23 3,460 to 5,239
4.24 $3,821 to $5,790
2,770
3,560$20 percent1.3 percent
4.25 5,240 to 6,989
4.26 $5,791 to $7,730
2,770
3,560$20 percent1.4 percent
4.27 6,990 to 8,719
4.28 $7,731 to $9,640
2,770
3,560$20 percent1.5 percent
4.29 8,720 to 12,219
4.30 $9,641 to $13,510
2,770
3,560$20 percent1.6 percent
4.31 12,220 to 13,949
4.32 $13,511 to $15,420
2,770
3,560$20 percent1.7 percent
4.33 13,950 to 15,709
4.34 $15,421 to $17,370
2,770
3,560$20 percent1.8 percent
4.35 15,710 to 17,449
4.36 $17,371 to $19,290
2,770
3,560$25 percent1.9 percent
4.37 17,450 to 19,179
4.38 $19,291 to $21,200
4Sec. 2.
23-01242 as introduced12/28/22 REVISOR EAP/BM 2,770
3,560$25 percent2.0 percent
5.1 19,180 to 24,429
5.2 $21,201 to $27,010
2,770
3,560$30 percent2.0 percent
5.3 24,430 to 26,169
5.4 $27,011 to $28,930
2,770
3,560$30 percent2.0 percent
5.5 26,170 to 29,669
5.6 $28,931 to $32,800
2,770
3,560$35 percent2.0 percent
5.7 29,670 to 41,859
5.8 $32,801 to $46,270
2,240
2,980$35 percent2.0 percent
5.9 41,860 to 61,049
5.10 $46,271 to $67,490
1,960
2,670$40 percent2.0 percent
5.11 61,050 to 69,769
5.12 $67,491 to $77,130
1,620
2,290$40 percent2.1 percent
5.13 69,770 to 78,499
5.14 $77,131 to $86,780
1,450
2,100$40 percent2.2 percent
5.15 78,500 to 87,219
5.16 $86,781 to $96,420
1,270
1,900$40 percent2.3 percent
5.17 87,220 to 95,939
5.18 $96,421 to $106,060
1,070
1,680$45 percent2.4 percent
5.19 95,940 to 101,179
5.20 $106,061 to $111,850
890
1,480$45 percent2.5 percent
5.21 101,180 to 104,689
5.22 $111,851 to $115,730
730
1,310$50 percent2.5 percent
5.23 104,690 to 108,919
5.24 $115,731 to $120,410
540
1,100$50 percent2.5 percent
5.25 108,920 to 113,149
5.26 $120,411 to $125,080
850$50 percent2.6 percent5.27 $125,081 to $135,000
600$50 percent2.7 percent5.28 $135,001 to $145,000
350$50 percent2.8 percent5.29 $145,001 to $155,000
5.30 The payment made to a claimant shall be the amount of the state refund calculated under
5.31this subdivision. No payment is allowed if the claimant's household income is $113,150
5.32$155,001 or more.
5.33 EFFECTIVE DATE.This section is effective for claims based on property taxes payable
5.34in 2024 and following years.
5.35 Sec. 3. Minnesota Statutes 2022, section 290A.04, subdivision 4, is amended to read:
5.36 Subd. 4.Inflation adjustment.The commissioner shall annually adjust the dollar
5.37amounts of the income thresholds and the maximum refunds under subdivisions 2 and 2a
5.38as provided in section 270C.22. The statutory year for subdivision 2 is 2023. The statutory
5.39year for subdivision 2a is 2018.
5Sec. 3.
23-01242 as introduced12/28/22 REVISOR EAP/BM 6.1 EFFECTIVE DATE.This section is effective for claims based on property taxes payable
6.2in 2025 and following years.
6Sec. 3.
23-01242 as introduced12/28/22 REVISOR EAP/BM