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SF2011 (Legislative Session 94 (2025-2026))

Unlimited Social Security subtraction provision

Related bill: HF2081

AI Generated Summary

This bill (S.F. No. 2011) proposes an amendment to Minnesota's tax code by providing an unlimited subtraction for Social Security benefits from taxable income for individual income tax purposes.

Key Provisions:

  1. Eliminates Income Limits & Phaseouts

    • Under current law, there are phaseout thresholds and percentage reductions based on adjusted gross income (AGI).
    • This bill removes those limits, allowing all Social Security benefits to be fully subtracted from taxable income, regardless of income level.

  2. Definition of Social Security Benefits

    • The bill references the federal definition in Section 86(d)(1) of the Internal Revenue Code.

  3. Statewide Tax Impact

    • This change would reduce taxable income for Minnesotans receiving Social Security benefits.
    • It would likely decrease state tax revenues as more retirees would owe less in income taxes.

Effect:

  • This bill benefits retirees and Social Security recipients by ensuring that their Social Security benefits are not taxed in Minnesota.
  • It aligns Minnesota's tax treatment with states that exempt Social Security income completely from taxation.

If passed, this bill would significantly reduce the state tax burden for retirees by making all Social Security benefits tax-free in Minnesota.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 26, 2025HouseFloorActionIntroduction and first reading
February 26, 2025SenateFloorActionIntroduction and first reading
February 26, 2025HouseFloorActionReferred toTaxes
February 26, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill modifies the subtraction of Social Security benefits from Minnesota taxable income under section 290.0132, subdivision 26.",
      "modified": [
        "Provides for an unlimited Social Security subtraction for certain income thresholds."
      ]
    },
    "citation": "290.0132",
    "subdivision": "subdivision 26"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references the adjustment of phaseout threshold amounts based on section 270C.22.",
      "modified": [
        "Adjusts the phaseout threshold amounts for inflation."
      ]
    },
    "citation": "270C.22",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references the definition of modified adjusted gross income under section 86(b)(2) of the Internal Revenue Code.",
      "modified": []
    },
    "citation": "86(b)(2)",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references the definition of Social Security benefits under section 86(d)(1) of the Internal Revenue Code.",
      "modified": []
    },
    "citation": "86(d)(1)",
    "subdivision": ""
  }
]

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