This bill amends Minnesota Statutes 2022, specifically section 290.06, to modify the income tax rates and brackets for individuals, estates, and trusts. The changes include increasing the income thresholds for various tax brackets for married individuals filing jointly, unmarried individuals, and heads of household. For instance, the first bracket for married individuals filing jointly is raised from $38,770 to $43,950, with subsequent brackets also adjusted upward. Additionally, a new top bracket is introduced, imposing a tax rate of 12.45 percent on income over $500,000 for married individuals and over $250,000 for unmarried individuals. Similar adjustments are made for heads of household, with their top bracket set for income over $400,000.

The bill also includes provisions for annual inflation adjustments to the tax brackets, which will be based on the changes in the rate brackets as determined by the commissioner. The statutory year for these adjustments is updated from 2019 to 2023, and the adjusted brackets will be rounded to the nearest $10. The effective dates for these changes are set for taxable years beginning after December 31, 2022, for the income tax rate modifications, and after December 31, 2023, for the inflation adjustments.

Statutes affected:
Introduction: 290.06