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SF2284 (Legislative Session 94 (2025-2026))

Unlimited Social Security subtraction provision

Related bill: HF1000

AI Generated Summary

The bill (S.F. No. 2284) proposes changes to Minnesota's individual income tax by allowing an unlimited subtraction of Social Security benefits from taxable income. It amends Minnesota Statutes 2024, section 290.0132, subdivision 26.

Key Provisions:

  1. Elimination of Limits and Phaseouts:

    • The current law provides certain limits and phaseout thresholds on the subtraction of Social Security benefits based on adjusted gross income (AGI).
    • This bill removes those limitations, allowing all Social Security benefits to be fully deducted from taxable income, regardless of income level.

  2. Definition of Social Security Benefits:

    • The bill maintains the federal definition of Social Security benefits as outlined in section 86(d)(1) of the Internal Revenue Code.

  3. Simplification:

    • The current system, which includes complex formulas for phaseouts and thresholds, is replaced with a straightforward, full exclusion of Social Security benefits from state taxable income.

Impact:

  • The bill would provide tax relief to Minnesota residents receiving Social Security, regardless of their total income.
  • This could result in a considerable reduction in state tax revenue, impacting the state's budget.

If enacted, Minnesota would join other states that do not tax Social Security benefits.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 05, 2025HouseFloorActionIntroduction and first reading
March 05, 2025SenateFloorActionIntroduction and first reading
March 05, 2025HouseFloorActionReferred toTaxes
March 05, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Added new phaseout threshold requirements."
      ],
      "removed": [],
      "summary": "This bill provides modifications regarding the subtraction of Social Security benefits in personal income taxation as specified in Minnesota Statutes section 290.0132, subdivision 26.",
      "modified": [
        "Adjusted the calculation methods for subtraction of taxable Social Security benefits, including the simplified and alternate subtractions and maximum subtraction limits."
      ]
    },
    "citation": "290.0132",
    "subdivision": "subdivision 26"
  }
]

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