S.F. No. 1239 is a legislative bill in Minnesota that proposes changes to how Social Security benefits are taxed at the state level. The bill aims to allow taxpayers to subtract a greater amount of their Social Security benefits from their taxable income when calculating their state income tax. This subtraction will be either a simplified subtraction or an alternate subtraction, depending on various factors such as the taxpayer's adjusted gross income and filing status.

Key aspects of the bill include: 1. The simplified subtraction method, which adjusts the subtraction based on the taxpayer's income and filing status. For example, it is reduced by 10% for each $4,000 of adjusted gross income over a specific threshold, which varies by filing status. 2. The alternate subtraction method allows a fixed subtraction amount but is also reduced based on a percentage of the taxpayer's provisional income exceeding specific thresholds.

These subtraction amounts and thresholds will be adjusted according to inflation and other economic factors to remain relevant over time. The goal of this bill is to potentially reduce the tax burden on residents receiving Social Security benefits, particularly as it adjusts with income levels and marital status.