This bill proposes modifications to Minnesota's individual income tax rates and brackets. Specifically, it amends Minnesota Statutes 2024, section 290.06, subdivisions 2c and 2d, to adjust tax brackets and rates for different filing statuses, including married individuals filing jointly, unmarried individuals, and heads of households. The revised tax brackets and rates are:

• Married filing jointly & surviving spouses:

  • 5.35% on income up to $47,620
    
  • 6.8% on income from $47,620 to $189,180
    
  • 7.85% on income from $189,180 to $330,410
    
  • 9.85% on income from $330,410 to $500,000
    
  • 12.45% on income over $500,000
    

• Married filing separately, estates, and trusts:

  • These taxpayers will use the same rates but with income brackets set at half the amounts listed above.

• Unmarried individuals:

  • 5.35% on income up to $32,570
    
  • 6.8% on income from $32,570 to $106,990
    
  • 7.85% on income from $106,990 to $198,630
    
  • 9.85% on income from $198,630 to $250,000
    
  • 12.45% on income over $250,000
    

• Heads of households:

  • 5.35% on income up to $40,100
    
  • 6.8% on income from $40,100 to $161,130
    
  • 7.85% on income from $161,130 to $264,050
    
  • 9.85% on income from $264,050 to $400,000
    
  • 12.45% on income over $400,000
    

Additionally: - Taxpayers with taxable net income below a certain threshold determined by the commissioner will calculate their tax using simplified tables with $100 income brackets. - Nonresidents and part-year Minnesota residents must compute their tax liability using a proportional formula based on Minnesota-source income. - Special provisions apply to nonresidents who are owners of qualifying pass-through entities that elect to pay entity-level tax.

This bill aims to adjust income tax rates and brackets to reflect updated income thresholds and provide a clearer tax structure for Minnesota residents.