HF1958

HF1958 (Legislative Session 94 (2025-2026))

Income tax rates and brackets modified.

Related bill: SF2290

AI Generated Summary

Purpose of the Bill

The purpose of this bill is to modify the individual income tax rates and brackets in the state of Minnesota, impacting tax calculations for married couples, unmarried individuals, and heads of households.

Main Provisions

Married Individuals Filing Joint Returns: The revised tax brackets and rates are adjusted with updated income thresholds for different tax rates, ranging from 5.35% on lower incomes to 12.45% on incomes over $500,000.
Unmarried Individuals: Similar adjustments are made with different income thresholds, applying tax rates from 5.35% to 12.45%.
Heads of Households: Adjusted tax brackets and rates from 5.35% to 12.45% are applied, with income thresholds specific for heads of household.
Nonresident Individuals: Tax calculation modifications for individuals who are not Minnesota residents for the entire year, where taxes are determined based on Minnesota source income compared to federal adjusted gross income.
Tax Tables: For taxpayers with incomes below a certain threshold, the tax will be computed using tax tables prepared by the commissioner of revenue, with consideration for fractional dollar amounts.
Special Provisions for Qualifying Entities: Special computation rules apply for nonresident individuals who are owners of qualifying entities electing specific tax treatments.

Significant Changes to Existing Law

This bill updates the income thresholds and rates for each tax bracket, thus changing how taxes are computed for various types of taxpayers in Minnesota. It also includes specific provisions for nonresident taxpayers and those associated with certain entities, aiming for more precise tax liability determinations based on Minnesota source income.

Relevant Terms

Income tax rates
Tax brackets
Married filing jointly
Unmarried individuals
Heads of households
Minnesota source income
Nonresident taxpayers
Qualifying entities

Bill text versions

Introduction PDF file

Actions

Date	Chamber	Where	Type	Name	Committee Name
March 05, 2025	House	Floor	Action	Introduction and first reading, referred to	Taxes
March 09, 2025	House	Floor	Action	Author added
March 19, 2025	House	Floor	Action	Author added

Citations

[
  {
    "analysis": {
      "added": [
        "New income bracket thresholds and tax rates for different categories of filers."
      ],
      "removed": [],
      "summary": "This bill modifies income tax rates and brackets for individuals under section 290.06.",
      "modified": [
        "Adjusts previous tax rate thresholds and percentages for individuals, estates, and trusts."
      ]
    },
    "citation": "290.06"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Section referenced in income calculations for Minnesota residents.",
      "modified": [
        "Referenced for addition calculations to federal adjusted gross income."
      ]
    },
    "citation": "290.0131"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Section referenced in income calculations for Minnesota subtractions.",
      "modified": [
        "Referenced for subtraction calculations for Minnesota assignable income portions."
      ]
    },
    "citation": "290.0132"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Section referenced in modifying adjusted gross income calculations.",
      "modified": [
        "Referenced for both addition and subtraction calculations related to Minnesota assignable income."
      ]
    },
    "citation": "290.0137"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Section referenced for special allocation and assignability provisions.",
      "modified": [
        "Referenced to apply specific allocation and assignability provisions."
      ]
    },
    "citation": "290.081"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Section referenced for Minnesota income source allocation.",
      "modified": [
        "Referenced to adjust income according to Minnesota source allocations."
      ]
    },
    "citation": "290.17"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Section referenced for tax reporting of certain electing qualifying entities.",
      "modified": [
        "Referenced for computing tax for non-residents linked to electing qualifying entities."
      ]
    },
    "citation": "289A.08"
  }
]