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SF2290 (Legislative Session 94 (2025-2026))

Income tax rates and brackets modifications provisions

Related bill: HF1958

AI Generated Summary

Purpose of the Bill

The primary purpose of this bill is to modify individual income tax rates and tax brackets for Minnesota residents. This bill aims to update the current tax structure to reflect new income thresholds and rates.

Main Provisions

  • Amendment to Tax Rates and Brackets: The bill adjusts the taxable income brackets and associated tax rates for various filing groups, including married individuals filing jointly, married individuals filing separately, unmarried individuals, and heads of households.
  • Filing Categories:
    • Married Filing Jointly and Surviving Spouses: The brackets are expanded with new income thresholds. For instance, income over $500,000 is taxed at a rate of 12.45%.
    • Married Filing Separately: The income brackets for this filing status are set at half of the amounts for joint filers.
    • Unmarried Individuals: Similar adjustments in brackets with a top rate of 12.45% applying to incomes over $250,000.
    • Heads of Household: New thresholds are provided with a similar top rate for incomes above $400,000.
  • Alternative Tax Table: For individuals earning below a certain threshold, the tax calculation will use simplified tables prepared by the commissioner of revenue.
  • Nonresidents and Part-Year Residents: Specific calculations for those not residing in Minnesota for the entire year, involving a proportionate share of federal adjusted gross income that is Minnesota-source.

Significant Changes to Existing Law

  • The bill increases the number of tax brackets and adjusts the existing income thresholds upward.
  • Sets a new top tax rate of 12.45% for the highest income brackets across various filing categories.
  • Introduces new provisions for the calculation of taxes for part-year residents or those with income from multiple states.

Relevant Terms

  • Income tax rates
  • Tax brackets
  • Minnesota income tax
  • Joint returns
  • Taxable income
  • Federal adjusted gross income
  • Nonresident tax calculation

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 09, 2025SenateFloorActionIntroduction and first reading
March 09, 2025SenateFloorActionReferred toTaxes
March 16, 2025SenateFloorActionAuthors added

Citations

 
[
  {
    "analysis": {
      "added": [
        "Introduces a new rate schedule for high-income brackets."
      ],
      "removed": [],
      "summary": "This bill modifies income tax rates and brackets for individuals, estates, and trusts under section 290.06.",
      "modified": [
        "Adjusts existing tax brackets and rates to higher income thresholds."
      ]
    },
    "citation": "290.06"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Relates to tax computation adjustments for non-residents and qualifying entity owners as per section 289A.08.",
      "modified": [
        "Changes in tax computation for qualifying entity owners based on new election options for entities."
      ]
    },
    "citation": "289A.08"
  }
]

Sponsors