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HF2081 (Legislative Session 94 (2025-2026))

Unlimited Social Security income tax subtraction provided.

Related bill: SF2011

AI Generated Summary

This bill proposes an amendment to Minnesota's tax code regarding the treatment of Social Security benefits for individual income tax purposes. Specifically, it seeks to allow an unlimited subtraction for Social Security income, meaning that all Social Security benefits received by taxpayers would be exempt from Minnesota state income tax.

Key changes in the bill: 1. Removes income limits and phaseout thresholds – Previously, Minnesota provided a partial subtraction for Social Security benefits, with the exemption amount decreasing as a taxpayer’s adjusted gross income exceeded certain thresholds. 2. Simplifies taxation of Social Security benefits – Under this bill, all Social Security income would be fully subtracted from taxable income, eliminating the tiered structure that currently determines how much Social Security income can be excluded. 3. Provides clarity on definitions – The bill maintains that the definition of Social Security benefits aligns with federal tax law (Section 86(d)(1) of the Internal Revenue Code).

Impact

  • Taxpayers, especially retirees, would see reduced state tax liabilities.
  • Revenue impact for Minnesota, as the state would lose tax revenue from previously taxable Social Security income.

This bill was introduced in the Minnesota House of Representatives and referred to the Committee on Taxes for further consideration.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 09, 2025HouseFloorActionIntroduction and first reading, referred toTaxes
March 09, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Introduces alternative subtraction calculation for Social Security benefits."
      ],
      "removed": [],
      "summary": "This bill amends the subtraction calculation for Social Security benefits under section 290.0132, subdivision 26.",
      "modified": [
        "Adjusts phaseout threshold and calculation for married taxpayers filing separately."
      ]
    },
    "citation": "290.0132",
    "subdivision": "subdivision 26"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill refers to section 270C.22 for adjusting phaseout threshold amounts.",
      "modified": []
    },
    "citation": "270C.22",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references section 86(b)(2) of the Internal Revenue Code for defining modified adjusted gross income.",
      "modified": []
    },
    "citation": "86(b)(2)",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references section 86(d)(1) of the Internal Revenue Code for defining Social Security benefits.",
      "modified": []
    },
    "citation": "86(d)(1)",
    "subdivision": ""
  }
]

Sponsors