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SF235 (Legislative Session 94 (2025-2026))

Unlimited Social Security subtraction permission

Related bill: HF100

AI Generated Summary

The SF No 235 bill proposes changes in how Social Security income is taxed for individuals in Minnesota. It introduces a system where taxpayers can subtract their Social Security benefits from their taxable income, choosing between two methods of subtraction: a simplified method and an alternate method.

  • The simplified method allows a subtraction which phases out at higher income levels. For a married couple filing jointly, the phaseout starts at $100,000 of adjusted gross income, and for single or head of household filers, it begins at $78,000. This subtraction is reduced by a specific percentage as income exceeds these thresholds.

  • The alternate method offers a fixed maximum subtraction amount ($5,840 for married filing jointly, $4,560 for single filers) which also reduces as provisional income (a term defined in the bill encompassing modified adjusted gross income and half of Social Security benefits) exceeds certain levels ($88,630 for married filing jointly, $69,250 for single filers).

These calculations aim to reduce or eliminate the tax burden on Social Security benefits for taxpayers, especially those with lower provisional incomes. The legislation specifies how these thresholds adjust annually for inflation, ensuring that the benefits continue to apply despite changes in the economy.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
January 15, 2025SenateFloorActionIntroduction and first reading
January 15, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "A new method for determining alternate subtraction options linked to federal tax terms."
      ],
      "removed": [
        "Elimination of previous income thresholds that phased out the subtraction."
      ],
      "summary": "The bill modifies the rules for Social Security subtraction under Minnesota Statutes section 290.0132, subdivision 26.",
      "modified": [
        "Adjusted the phaseout and subtraction thresholds amounts, and accounting methods for different filing statuses."
      ]
    },
    "citation": "290.0132"
  }
]

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