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SF3132 (Legislative Session 94 (2025-2026))

Income tax rates and brackets modification

AI Generated Summary

Purpose of the Bill

The bill aims to modify the individual income tax rates and brackets for residents of Minnesota. It focuses on amending existing legislation to redefine how income taxes are calculated for different groups, including married couples, unmarried individuals, heads of households, and estates and trusts.

Main Provisions

  • Revised Tax Rates for Married Couples Filing Jointly: The updated tax bracket begins with a rate of 5.35% on income up to $47,620, increasing to 12.45% for income over $500,000.
  • Tax Rates for Unmarried Individuals: For single filers, the first $32,570 is taxed at 5.35%, with income over $250,000 taxed at 12.45%.
  • Rates for Heads of Households: Heads of households begin at a 5.35% tax rate on the first $40,100, with a maximum rate of 12.45% for income above $400,000.
  • Alternative Tax Calculation: For those with smaller taxable incomes, a simplified tax table will be used, prepared by the commissioner of revenue. Tax calculations will disregard fractions of a dollar unless they are 50 cents or more.
  • Non-Residents’ Tax Computation: Individuals who do not reside in Minnesota for the entire year have specific guidelines for calculating their state tax based on the portion of their income sourced from Minnesota.

Significant Changes to Existing Law

  • The bill changes the income brackets for each tax rate, generally raising the income levels that each rate applies to.
  • It adjusts the calculations to include various components of an individual's income, particularly for part-year residents and those with incomes sourced both within and outside of Minnesota.

Relevant Terms

income tax, tax rates, tax brackets, married filing jointly, single filers, head of household, non-resident tax, tax computation, Minnesota State Tax Code, income brackets.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 31, 2025SenateFloorActionIntroduction and first reading
March 31, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill modifies income tax rates and brackets under section 290.06 subdivision 2c.",
      "modified": [
        "Updates tax rate brackets and percentages for various income levels for individuals, estates, and trusts."
      ]
    },
    "citation": "290.06",
    "subdivision": "subdivision 2c"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references sections related to tax additions as part of income calculations.",
      "modified": [
        "Updates to which additions apply to the computation of Minnesota income tax for certain taxpayers."
      ]
    },
    "citation": "290.0131",
    "subdivision": "subdivisions 2, 6, 8 to 10, 16, 17, 19 and 20"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references sections related to tax subtractions as part of income calculations.",
      "modified": [
        "Changes in calculations for subtractions applicable in Minnesota tax liability computation."
      ]
    },
    "citation": "290.0132",
    "subdivision": "subdivisions 2, 9, 10, 14, 15, 17, 18, 27, 31 and 32"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references section 290.081 for allocation and assignability provisions.",
      "modified": [
        "Clarifies application of section for income allocation and assignability provisions."
      ]
    },
    "citation": "290.081",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references section 290.17 for income allocation and assignability provisions.",
      "modified": [
        "Elaborates on use within the context of new tax rate calculations."
      ]
    },
    "citation": "290.17",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references the option provided to qualifying entities regarding tax payments.",
      "modified": [
        "Details on tax computation changes for qualifying entities that elect to pay tax."
      ]
    },
    "citation": "289A.08",
    "subdivision": "subdivision 7a"
  }
]

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