1.1 A bill for an act
1.2 relating to taxation; property; modifying the definition of income for purposes of
1.3 the property tax refund; amending Minnesota Statutes 2024, section 290A.03,
1.4 subdivision 3.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2024, section 290A.03, subdivision 3, is amended to read:
1.7 Subd. 3.Income.(a) "Income" means the sum of the following:
1.8 (1) federal adjusted gross income as defined in the Internal Revenue Code; and
1.9 (2) the sum of the following amounts to the extent not included in clause (1):
1.10 (i) all nontaxable income;
1.11 (ii) the amount of a passive activity loss that is not disallowed as a result of section 469,
1.12paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss
1.13carryover allowed under section 469(b) of the Internal Revenue Code;
1.14 (iii) an amount equal to the total of any discharge of qualified farm indebtedness of a
1.15solvent individual excluded from gross income under section 108(g) of the Internal Revenue
1.16Code;
1.17 (iv) cash public assistance and relief;
1.18 (v) any pension or annuity (including railroad retirement benefits, all payments received
1.19under the federal Social Security Act, Supplemental Security Income, and veterans benefits),
1.20which was not exclusively funded by the claimant or spouse, or which was funded exclusively
1Section 1.
REVISOR EAP/AC 25-0208001/24/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 1643
NINETY-FOURTH SESSION 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.
REVISOR EAP/AC 25-0208001/24/25 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; or
3.19 (10) the amount of a net operating loss carryforward allowed under section
3.20172(b)(1)(A)(ii)(II) of the Internal Revenue Code.
3.21 (c) The sum of the following amounts may be subtracted from income:
3.22 (1) for the claimant's first dependent, the exemption amount multiplied by 1.4;
3.23 (2) for the claimant's second dependent, the exemption amount multiplied by 1.3;
3.24 (3) for the claimant's third dependent, the exemption amount multiplied by 1.2;
3.25 (4) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
3.26 (5) for the claimant's fifth dependent, the exemption amount; and
3.27 (6) if the claimant or claimant's spouse had a disability or attained the age of 65 on or
3.28before December 31 of the year for which the taxes were levied, the exemption amount.
3.29 (d) For purposes of this subdivision, the following terms have the meanings given:
3Section 1.
REVISOR EAP/AC 25-0208001/24/25 4.1 (1) "exemption amount" means the exemption amount under section 290.0121,
4.2subdivision 1, paragraph (b), for the taxable year for which the income is reported;
4.3 (2) "retirement base amount" means the deductible amount for the taxable year for the
4.4claimant and spouse under section 219(b)(5)(A) of the Internal Revenue Code, adjusted for
4.5inflation as provided in section 219(b)(5)(C) of the Internal Revenue Code, without regard
4.6to whether the claimant or spouse claimed a deduction; and
4.7 (3) "traditional or Roth style retirement account or plan" means retirement plans under
4.8sections 401, 403, 408, 408A, and 457 of the Internal Revenue Code.
4.9 EFFECTIVE DATE.This section is effective for claims based on property taxes payable
4.10in 2025 and thereafter.
4Section 1.
REVISOR EAP/AC 25-0208001/24/25