1.1 A bill for an act
1.2 relating to taxation; individual income; reducing all individual income tax rates
1.3 by one percentage point; amending Minnesota Statutes 2024, section 290.06,
1.4 subdivisions 2c, 2d.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2024, section 290.06, subdivision 2c, is amended to read:
1.7 Subd. 2c.Schedules of rates for individuals, estates, and trusts.(a) The income taxes
1.8imposed by this chapter upon married individuals filing joint returns and surviving spouses
1.9as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
1.10their taxable net income the following schedule of rates:
1.11 (1) On the first $38,770 $47,620, 5.35 4.35 percent;
1.12 (2) On all over $38,770 $47,620, but not over $154,020 $189,180, 6.8 5.8 percent;
1.13 (3) On all over $154,020 $189,180, but not over $269,010 $330,410, 7.85 6.85 percent;
1.14 (4) On all over $269,010 $330,410, 9.85 8.85 percent.
1.15 Married individuals filing separate returns, estates, and trusts must compute their income
1.16tax by applying the above rates to their taxable income, except that the income brackets
1.17will be one-half of the above amounts after the adjustment required in subdivision 2d.
1.18 (b) The income taxes imposed by this chapter upon unmarried individuals must be
1.19computed by applying to taxable net income the following schedule of rates:
1.20 (1) On the first $26,520 $32,570, 5.35 4.35 percent;
1.21 (2) On all over $26,520 $32,570, but not over $87,110 $106,990, 6.8 5.8 percent;
1Section 1.
25-02158 as introduced01/24/25 REVISOR EAP/AC
SENATE
STATE OF MINNESOTA
S.F. No. 2010NINETY-FOURTH SESSION
(SENATE AUTHORS: RASMUSSON)
OFFICIAL STATUSD-PGDATE
Introduction and first reading02/27/2025
Referred to Taxes 2.1 (3) On all over $87,110 $106,990, but not over $161,720 $198,630, 7.85 6.85 percent;
2.2 (4) On all over $161,720 $198,630, 9.85 8.85 percent.
2.3 (c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
2.4a head of household as defined in section 2(b) of the Internal Revenue Code must be
2.5computed by applying to taxable net income the following schedule of rates:
2.6 (1) On the first $32,650 $40,100, 5.35 4.35 percent;
2.7 (2) On all over $32,650 $40,100, but not over $131,190 $161,130, 6.8 5.8 percent;
2.8 (3) On all over $131,190 $161,130, but not over $214,980 $264,050, 7.85 6.85 percent;
2.9 (4) On all over $214,980 $264,050, 9.85 8.85 percent.
2.10 (d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
2.11of any individual taxpayer whose taxable net income for the taxable year is less than an
2.12amount determined by the commissioner must be computed in accordance with tables
2.13prepared and issued by the commissioner of revenue based on income brackets of not more
2.14than $100. The amount of tax for each bracket shall be computed at the rates set forth in
2.15this subdivision, provided that the commissioner may disregard a fractional part of a dollar
2.16unless it amounts to 50 cents or more, in which case it may be increased to $1.
2.17 (e) An individual who is not a Minnesota resident for the entire year must compute the
2.18individual's Minnesota income tax as provided in this subdivision. After the application of
2.19the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
2.20by a fraction in which:
2.21 (1) the numerator is the individual's Minnesota source federal adjusted gross income as
2.22defined in section 62 of the Internal Revenue Code and increased by:
2.23 (i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, 17, 19,
2.24and 20, and 290.0137, paragraph (a); and reduced by
2.25 (ii) the Minnesota assignable portion of the subtraction for United States government
2.26interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
2.27subdivisions 9, 10, 14, 15, 17, 18, 27, 31, and 32, and 290.0137, paragraph (c), after applying
2.28the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
2.29 (2) the denominator is the individual's federal adjusted gross income as defined in section
2.3062 of the Internal Revenue Code, increased by:
2.31 (i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, 17, 19,
2.32and 20, and 290.0137, paragraph (a); and reduced by
2Section 1.
25-02158 as introduced01/24/25 REVISOR EAP/AC 3.1 (ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, 27,
3.231, and 32, and 290.0137, paragraph (c).
3.3 (f) If an individual who is not a Minnesota resident for the entire year is a qualifying
3.4owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
3.57a, paragraph (b), the individual must compute the individual's Minnesota income tax as
3.6provided in paragraph (e), and also must include, to the extent attributed to the electing
3.7qualifying entity:
3.8 (1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
3.9addition under section 290.0131, subdivision 5; and
3.10 (2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
3.11subtraction under section 290.0132, subdivision 3.
3.12 (g) For taxable years beginning after December 31, 2024, and before January 1, 2026,
3.13the rates in paragraphs (a), (b), and (c) are adjusted as follows:
3.14 (1) the 4.35 percent rate in paragraphs (a), clause (1); (b), clause (1); and (c), clause (1),
3.15must equal 4.85 percent;
3.16 (2) the 5.8 percent rate in paragraphs (a), clause (2); (b), clause (2); and (c), clause (2),
3.17must equal 6.3 percent;
3.18 (3) the 6.85 percent rate in paragraphs (a), clause (3); (b), clause (3); and (c), clause (3),
3.19must equal 7.35 percent; and
3.20 (4) the 8.85 percent rate in paragraphs (a), clause (4); (b), clause (4); and (c), clause (4),
3.21must equal 9.35 percent.
3.22 (h) For taxable years beginning after December 31, 2025, and before January 1, 2027,
3.23the rates in paragraphs (a), (b), and (c) are adjusted as follows:
3.24 (1) the 4.35 percent rate in paragraphs (a), clause (1); (b), clause (1); and (c), clause (1),
3.25must equal 4.6 percent;
3.26 (2) the 5.8 percent rate in paragraphs (a), clause (2); (b), clause (2); and (c), clause (2),
3.27must equal 6.05 percent;
3.28 (3) the 6.85 percent rate in paragraphs (a), clause (3); (b), clause (3); and (c), clause (3),
3.29must equal 7.10 percent; and
3.30 (4) the 8.85 percent rate in paragraphs (a), clause (4); (b), clause (4); and (c), clause (4),
3.31must equal 9.10 percent.
3Section 1.
25-02158 as introduced01/24/25 REVISOR EAP/AC 4.1 EFFECTIVE DATE.This section is effective for taxable years beginning after December
4.231, 2024.
4.3 Sec. 2. Minnesota Statutes 2024, section 290.06, subdivision 2d, is amended to read:
4.4 Subd. 2d.Inflation adjustment of brackets.The commissioner shall annually adjust
4.5the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed
4.6in subdivision 2c as provided in section 270C.22. The statutory year is taxable year 2019
4.72025. The rate applicable to any rate bracket must not be changed. The dollar amounts
4.8setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate
4.9brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in
4.10$5, it must be rounded up to the nearest $10 amount. The commissioner shall determine the
4.11rate bracket for married filing separate returns after this adjustment is done. The rate bracket
4.12for married filing separate must be one-half of the rate bracket for married filing joint.
4.13 EFFECTIVE DATE.This section is effective for taxable years beginning after December
4.1431, 2025.
4Sec. 2.
25-02158 as introduced01/24/25 REVISOR EAP/AC