The bill amends Minnesota Statutes to establish a public pension benefit subtraction for individual income tax purposes. It modifies section 290.0132, subdivision 26, by changing the language regarding Social Security benefits, specifically replacing the term "a portion" with "The amount" of taxable benefits received by a taxpayer in the taxable year. The previous maximum subtraction limits based on provisional income for married taxpayers, single or head-of-household taxpayers, and married taxpayers filing separately have been removed. Additionally, a new subdivision (31) is added to define the public pension income subtraction, detailing how the federal and state exclusions will be calculated based on provisional income and qualified benefits.

Furthermore, the bill amends section 290.091, subdivision 2, to include the new definition of "public pension exclusion" and outlines the adjustments to maximum exclusions and phaseout thresholds. The effective date for these changes is set for taxable years beginning after December 31, 2022. Overall, the bill aims to provide tax relief for individuals receiving public pension benefits by simplifying the calculation of exclusions and removing previous limitations based on income thresholds.

Statutes affected:
Introduction: 290.0132, 290.091