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HF2502 (Legislative Session 94 (2025-2026))

Individual income tax; child credit phaseout increased to eliminate the marriage penalty.

AI Generated Summary

Purpose of the Bill

The bill aims to modify the taxation system in Minnesota, specifically addressing the individual income tax structure. It seeks to eliminate the marriage penalty by adjusting the phaseout limits for the child credit.

Main Provisions

  • The bill proposes an increase in the income levels at which phaseouts for child tax credits begin.
  • For married taxpayers filing jointly, the bill raises the threshold for the phaseout from $35,000 to $63,900.
  • For all other taxpayers, the threshold is increased from $29,500 to $31,950.

Significant Changes

  • This legislative change reduces the marriage penalty, which is the higher tax burden married couples face compared to individual taxpayers, by aligning the income thresholds for credit phaseouts.
  • By increasing these thresholds, more taxpayers, especially those who are married, can take full advantage of child tax credits, potentially increasing their disposable income.

Relevant Terms

  • Taxation
  • Individual income tax
  • Child credit
  • Marriage penalty
  • Phaseout threshold
  • Married filing jointly
  • Tax credits

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 16, 2025HouseFloorActionIntroduction and first reading, referred toTaxes
March 19, 2025HouseFloorActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [
        "Adjusts phaseout thresholds for married taxpayers filing jointly and other filers."
      ],
      "removed": [],
      "summary": "This bill modifies the phaseout of the child credit to address the marriage penalty under section 290.0661.",
      "modified": [
        "Increases income thresholds to eliminate the marriage penalty, adjusting from $35,000 to $63,900 for married taxpayers and from $29,500 to $31,950 for other filers."
      ]
    },
    "citation": "290.0661"
  }
]

Sponsors