This bill, S.F. No. 2056, proposes modifications to the definition of "income" for purposes of determining eligibility for Minnesota's property tax refund. Specifically, it amends Minnesota Statutes 2024, section 290A.03, subdivision 3, by making adjustments to what qualifies as income and what can be excluded.

Key Changes:

1. Expanded Income Definition:

   • Includes federal adjusted gross income and various non-taxable income sources, such as:
     • Certain passive activity losses.
     • Discharged farm indebtedness.
     • Public assistance and relief payments.
     • Pensions, annuities, Social Security, and veterans benefits (unless exclusively funded by the recipient).
     • Income from workers' compensation, nontaxable scholarships, disability, and strike benefits.
     • Retirement account distributions and some education-related deductions.

2. Income Exclusions:

   • Excludes items like:
     • Fully self-funded pensions (if contributions were previously taxed).
     • Government-provided food or relief.
     • Child support payments.
     • Certain veterans’ disability payments.
     • Specific net operating loss carryforwards.

3. Income Deductions for Dependents:

   • Allows deductions for dependents and for taxpayers aged 65+ or with a disability.
   • Deduction amounts vary based on the number of dependents.

4. Definitions Clarified:

   • Key terms like "exemption amount," "retirement base amount," and "traditional or Roth-style retirement account or plan" are defined based on references to the Internal Revenue Code.

Purpose:

This bill aims to refine the calculation of income for property tax refund eligibility, ensuring that non-traditional forms of income (such as certain retirement withdrawals and public assistance) are accurately considered. The changes could impact tax refunds received by Minnesota homeowners and renters, potentially altering eligibility or benefit levels.

Would you like a more specific breakdown of any part?