1.1 A bill for an act
1.2 relating to taxation; individual income; allowing an unlimited Social Security
1.3 subtraction; amending Minnesota Statutes 2024, section 290.0132, subdivision
1.4 26.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2024, section 290.0132, subdivision 26, is amended to read:
1.7 Subd. 26.Social Security benefits.(a) A taxpayer is allowed a subtraction equal to the
1.8greater of the simplified subtraction allowed under paragraph (b) or the alternate subtraction
1.9determined under paragraph (e).
1.10 (b) A taxpayer's simplified subtraction equals the amount of taxable social security
1.11benefits, as reduced under paragraphs (c) and (d).
1.12 (c) For a taxpayer other than a married taxpayer filing a separate return with adjusted
1.13gross income above the phaseout threshold, the simplified subtraction is reduced by ten
1.14percent for each $4,000 of adjusted gross income, or fraction thereof, in excess of the
1.15phaseout threshold. The phaseout threshold equals:
1.16 (1) $100,000 for a married taxpayer filing a joint return or surviving spouse;
1.17 (2) $78,000 for a single or head of household taxpayer; and
1.18 (3) for a married taxpayer filing a separate return, half the amount for a married taxpayer
1.19filing a joint return.
1.20 (d) For a married taxpayer filing a separate return, the simplified subtraction is reduced
1.21by ten percent for each $2,000 of adjusted gross income, or fraction thereof, in excess of
1.22the phaseout threshold.
1Section 1.
REVISOR EAP/DG 25-0109212/13/24
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 173
NINETY-FOURTH SESSION
Authored by Gillman01/22/2025
The bill was read for the first time and referred to the Committee on Taxes 2.1 (e) A taxpayer's alternate subtraction equals the lesser of taxable Social Security benefits
2.2or a maximum subtraction subject to the limits under paragraphs (f), (g), and (h).
2.3 (f) For married taxpayers filing a joint return and surviving spouses, the maximum
2.4subtraction under paragraph (c) equals $5,840. The maximum subtraction is reduced by 20
2.5percent of provisional income over $88,630. In no case is the subtraction less than zero.
2.6 (g) For single or head-of-household taxpayers, the maximum subtraction under paragraph
2.7(c) equals $4,560. The maximum subtraction is reduced by 20 percent of provisional income
2.8over $69,250. In no case is the subtraction less than zero.
2.9 (h) For married taxpayers filing separate returns, the maximum subtraction under
2.10paragraph (c) equals one-half the maximum subtraction for joint returns under paragraph
2.11(f). The maximum subtraction is reduced by 20 percent of provisional income over one-half
2.12the threshold amount specified in paragraph (d). In no case is the subtraction less than zero.
2.13 (i) For purposes of this subdivision, "provisional income" means modified adjusted gross
2.14income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of the
2.15taxable Social Security benefits received during the taxable year, and "Social Security
2.16benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.
2.17 (j) The commissioner shall adjust the phaseout threshold amounts in paragraphs (c) and
2.18(d) as provided in section 270C.22. The statutory year is taxable year 2023. The maximum
2.19subtraction and threshold amounts as adjusted must be rounded to the nearest $10 amount.
2.20If the amount ends in $5, the amount is rounded up to the nearest $10 amount.
2.21 The amount of Social Security benefits received is a subtraction.
2.22 EFFECTIVE DATE.This section is effective for taxable years beginning after December
2.2331, 2024.
2Section 1.
REVISOR EAP/DG 25-0109212/13/24