HF191

The legislative bill HF No. 191, introduced in the Minnesota House of Representatives, proposes amendments to the state's tax law specifically regarding how Social Security benefits are taxed for individual taxpayers. The key change in this bill is the introduction of an unlimited subtraction option for Social Security benefits. This means taxpayers can choose to subtract either a simplified amount based on taxable Social Security benefits, which adjusts according to their income level, or an alternate amount determined under newly defined conditions.

The proposed changes introduce various income thresholds and reductions based on the taxpayer's filing status—such as being married and filing jointly, single, or head of household—that influence the potential subtraction amount. For married taxpayers filing jointly, the initial maximum subtraction is $5,840, which reduces as provisional income exceeds $88,630. Single or head of household taxpayers start with a maximum subtraction of $4,560, which reduces when provisional income exceeds $69,250.

Additionally, the bill outlines adjustments to these amounts based on changes in income, with specific phaseouts defined that reduce the subtraction amount as income increases. The Commissioner of Revenue is tasked to adjust these thresholds periodically to reflect economic changes. This legislation aims to modify tax calculations for Social Security income, potentially lowering the tax liability for many recipients depending on their income levels and marital status.