Minneslate Logo

SF1231 (Legislative Session 94 (2025-2026))

Unlimited Social Security income tax subtraction authorization

AI Generated Summary

Senate Bill S.F. No. 1231 focuses on altering individual income tax related to Social Security benefits in Minnesota. It introduces an option for taxpayers to subtract their Social Security benefits from their taxable income. The bill lays out two ways to determine the subtraction:

  1. Simplified Subtraction: This method allows taxpayers to subtract the amount of taxable Social Security benefits, which might be reduced based on their adjusted gross income exceeding certain limits:
    • $100,000 for married couples filing jointly or surviving spouses.
    • $78,000 for single or head of household taxpayers.
    • Half of the couple's amount for married taxpayers filing separately.

If adjusted gross income surpasses these thresholds, the subtraction is reduced by 10% for each increment of $4,000 (or $2,000 for those married filing separately).

  1. Alternate Subtraction: This method lets taxpayers subtract a fixed amount (determined by filing status), which is then reduced based on provisional income exceeding certain amounts:
    • $5,840 for married jointly and surviving spouses (reduced if provisional income is over $88,630).
    • $4,560 for single or head of household (reduced if provisional income is over $69,250).
    • Half of the joint filer amount for those married filing separately, with a proportional reduction based on their income.

The bill specifies that the subtraction cannot drop below zero and details how provisional income is calculated for these purposes. It also directs the relevant state commissioner to adjust the phaseout threshold amounts in future based on inflation, rounding to the nearest $10.

This is essentially a provision designed to ease the tax burden on individuals receiving Social Security, particularly those with higher incomes that currently could face larger tax liabilities on their benefits.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 09, 2025SenateFloorActionIntroduction and first reading
February 09, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Expands the definition of the Social Security benefits subtraction and adjusts phaseout thresholds."
      ],
      "removed": [
        "Previous discriminatory factors against married taxpayers filing separately."
      ],
      "summary": "This bill amends existing tax provisions related to Social Security benefits under section 290.0132, subdivision 26.",
      "modified": [
        "Alters the calculations for Social Security benefits subtractions and phaseout thresholds."
      ]
    },
    "citation": "290.0132"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References the method for adjusting phaseout threshold amounts related to Social Security benefits.",
      "modified": [
        "Specifies adjustment mechanisms for tax thresholds."
      ]
    },
    "citation": "270C.22"
  }
]

Sponsors