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SF3132 (Legislative Session 94 (2025-2026))

Income tax rates and brackets modification

AI Generated Summary

Purpose of the Bill

The bill aims to modify the individual income tax rates and brackets in the state of Minnesota. This includes changes to the income categories and corresponding tax rates for various types of taxpayers, including married couples, single individuals, and heads of households.

Main Provisions

  • New Tax Brackets for Married Couples Filing Jointly: Income up to $47,620 will be taxed at 5.35%, income between $47,620 and $189,180 at 6.8%, income between $189,180 and $330,410 at 7.85%, income between $330,410 and $500,000 at 9.85%, and income over $500,000 at 12.45%.
  • New Tax Brackets for Single Individuals: Income up to $32,570 will be taxed at 5.35%, income between $32,570 and $106,990 at 6.8%, income between $106,990 and $198,630 at 7.85%, income between $198,630 and $250,000 at 9.85%, and income over $250,000 at 12.45%.
  • New Tax Brackets for Heads of Households: Income up to $40,100 will be taxed at 5.35%, income between $40,100 and $161,130 at 6.8%, income between $161,130 and $264,050 at 7.85%, income between $264,050 and $400,000 at 9.85%, and income over $400,000 at 12.45%.

Significant Changes to Existing Law

  • The bill outlines a revision of the income brackets and associated tax rates which will potentially affect all income taxpayers in Minnesota. This could result in increased taxes for higher income groups due to the new highest tax rate of 12.45% on income over specified thresholds.
  • The bill also specifies that for married couples filing separately, estates, and trusts, income brackets will be half of those set for married couples filing jointly.

Additional Details

  • Taxpayers with incomes below a certain threshold, to be decided by the commissioner, will have their tax computed according to pre-determined tables.
  • Special provisions are included for individuals who are not Minnesota residents for the entire year. They must calculate tax liability based on the portion of income sourced from Minnesota, with adjustments for specific additions and subtractions.

Relevant Terms

income tax, tax rates, income brackets, joint returns, single filers, heads of households, Minnesota residents, non-residents, taxable income, tax liability.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 31, 2025SenateFloorActionIntroduction and first reading
March 31, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill amends income tax rates and brackets for individuals, estates, and trusts under section 290.06.",
      "modified": [
        "Updates the income brackets and associated tax rates for married and unmarried individuals, as well as heads of households."
      ]
    },
    "citation": "290.06",
    "subdivision": "subdivisions 2c, 2d"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references necessary additions required under section 290.0131 for income tax computation for non-residents.",
      "modified": []
    },
    "citation": "290.0131",
    "subdivision": "subdivisions 2, 6, 8 to 10, 16, 17, 19, and 20"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill involves paragraph a and c regarding income tax modifications for non-residents.",
      "modified": []
    },
    "citation": "290.0137",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references subtractions for income tax modifications concerning non-residents under section 290.0132.",
      "modified": []
    },
    "citation": "290.0132",
    "subdivision": "subdivisions 2, 9, 10, 14, 15, 17, 18, 27, 31, and 32"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill applies section 290.081 for allocation and assignability provisions for income tax computation for non-residents.",
      "modified": []
    },
    "citation": "290.081",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This refers to allocation and assignability provisions under section 290.17 regarding non-resident income tax computation.",
      "modified": []
    },
    "citation": "290.17",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill involves tax payment computation for qualifying entity owners as described in section 289A.08.",
      "modified": []
    },
    "citation": "289A.08",
    "subdivision": "subdivision 7a"
  }
]

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