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SF2290 (Legislative Session 94 (2025-2026))

Income tax rates and brackets modifications provisions

Related bill: HF1958

AI Generated Summary

The bill S.F. No. 2290 proposes changes to Minnesota's individual income tax rates and brackets. It amends Minnesota Statutes 2024, section 290.06, subdivisions 2c and 2d, adjusting the income tax brackets and rates for different filing statuses.

Key Changes:

  1. Revised Tax Brackets & Rates:
    • Married individuals filing jointly & surviving spouses:
      • 5.35% on income up to $47,620 (previously $38,770).
      • 6.8% on income between $47,620 and $189,180 (previously $38,770 - $154,020).
      • 7.85% on income between $189,180 and $330,410 (previously $154,020 - $269,010).
      • 9.85% on income between $330,410 and $500,000.
      • 12.45% on income over $500,000.

  • Married individuals filing separately, estates, and trusts follow the same rate structure but with income brackets at half the amounts listed above.

  • Unmarried individuals:

    • 5.35% on income up to $32,570.
    • 6.8% on income between $32,570 and $106,990.
    • 7.85% on income between $106,990 and $198,630.
    • 9.85% on income between $198,630 and $250,000.
    • 12.45% on income over $250,000.

  • Heads of household:

    • 5.35% on income up to $40,100.
    • 6.8% on income between $40,100 and $161,130.
    • 7.85% on income between $161,130 and $264,050.
    • 9.85% on income between $264,050 and $400,000.
    • 12.45% on income over $400,000.

  1. Adjustments for Partial-Year Residents:

    • Taxable income for non-full-year residents is calculated based on the portion of their federal adjusted gross income (FAGI) that is Minnesota-source income.

  2. Special Provisions for Pass-Through Entities:

    • If a non-resident taxpayer is an owner of a pass-through entity electing to pay Minnesota income tax at the entity level, this is factored into their individual tax calculation.

Summary:

This bill modifies individual income tax brackets and rates, generally raising the income thresholds before higher tax rates apply. It also clarifies tax calculations for part-year residents and those with pass-through entity income.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 09, 2025SenateFloorActionIntroduction and first reading
March 09, 2025HouseFloorActionIntroduction and first reading
March 09, 2025SenateFloorActionIntroduction and first reading
March 09, 2025SenateFloorActionReferred toTaxes
March 09, 2025HouseFloorActionReferred toTaxes
March 16, 2025SenateFloorActionAuthors added
March 16, 2025SenateFloorActionAuthors added

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill modifies income tax rates and brackets for individuals, estates, and trusts under section 290.06, subdivision 2c.",
      "modified": [
        "Adjusts the income brackets and their applicable tax rates for various filing categories."
      ]
    },
    "citation": "290.06",
    "subdivision": "subdivision 2c"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill addresses the adjustment of income brackets for separate returns under section 290.06, subdivision 2d.",
      "modified": [
        "Explains adjustments to the income brackets for married individuals filing separately, estates, and trusts."
      ]
    },
    "citation": "290.06",
    "subdivision": "subdivision 2d"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill references this section when discussing tax computation for non-residents who are qualifying owners in entities opting for a different tax payment method.",
      "modified": []
    },
    "citation": "289A.08",
    "subdivision": "subdivision 7a"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "These sections are used to compute Minnesota taxable income for non-residents and qualifying owners of entities.",
      "modified": []
    },
    "citation": "290.0131",
    "subdivision": "subdivisions 2, 6, 8 to 10, 16, 17, 19, and 20"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "These sections are referenced for subtracting from the federal adjusted gross income when calculating Minnesota tax liability.",
      "modified": []
    },
    "citation": "290.0132",
    "subdivision": "subdivisions 2, 9, 10, 14, 15, 17, 18, 27, 31, and 32"
  }
]

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