The bill proposes an amendment to Minnesota tax law to provide a subtraction for income received from foreign service pensions. Specifically, it allows individuals to subtract from their taxable income any pension or retirement pay received from the federal government for service in the U.S. foreign service, as established under Title 22, Section 4071 of the U.S. Code.

The amount of the subtraction is determined by multiplying the pension income by a fraction, where the numerator is the number of years the taxpayer served in foreign service and the denominator is the total number of years of civil service for which the taxpayer receives pension income.

If enacted, this bill would reduce the taxable income for retired foreign service employees residing in Minnesota by exempting a portion of their foreign service pension from state income tax.