The bill being introduced seeks to adjust how Social Security income is taxed for individuals in Minnesota. It proposes to allow residents to subtract some amount of their Social Security benefits from their taxable income. Here’s how it works:

1. Subtraction Options: Taxpayers can choose between a simplified subtraction and an alternate subtraction method.

   • Simplified Subtraction: This amount is reduced if the taxpayer's income exceeds certain thresholds. The more you earn over these thresholds, the less you can subtract.
   • Alternate Subtraction: This method uses a different set of limits and calculations, which might benefit those with different income levels or filing statuses differently.

2. Income Thresholds and Reductions: There are specific income amounts set, beyond which the subtraction starts to decrease:

   • For a married couple filing jointly or a surviving spouse, the phase-out starts at $100,000.
   • For single or head of household filers, it starts at $78,000.
   • For married filing separately, it is half that of joint filers.

These subtractions are further reduced based on how much over these thresholds a taxpayer’s income is.

1. Provisional Income Considerations: The bill defines provisional income as adjusted gross income plus half of the Social Security benefits received.

2. Adjustments for Inflation: The thresholds for phase-outs and maximum subtractions will be adjusted in keeping with inflation as needed.

In summary, the bill aims to provide a tax benefit on Social Security income, with the benefit amount dependent on other income and filing status, encouraging a more tailored approach to individual financial situations.