HF347

This legislative bill aims to modify the taxation of military retirement pay in Minnesota. Specifically, it proposes to expand the income subtraction available for military pensions when calculating state taxes. This means that more of the retirement pay received from federal pensions due to military service would not be taxed by the state.

The bill outlines three specific types of military retirement payments that would qualify for this tax subtraction: 1. Retirement pay calculated under specific sections of the United States Code related to military service. 2. A portion of pensions from the federal employee retirement system (based on the proportion of the taxpayer's military service to their total service). 3. A portion of pensions from the civil service retirement system (also based on the proportion of military service to total service).

Additionally, the bill specifies that individuals who choose this particular tax subtraction cannot simultaneously claim a certain tax credit intended for low-income taxpayers. The calculations for how much of the pension is exempt from state taxes depend on the ratio of military service to total government service, and the bill details how to calculate this ratio precisely.

Overall, the goal of the bill is to reduce the state tax burden on individuals receiving military pensions, acknowledging their service and potentially making Minnesota a more attractive home for military retirees.