This bill amends Minnesota Statutes to provide a subtraction for certain discharges of indebtedness from individual income tax calculations. Specifically, it introduces a new subdivision under section 290.0132 that allows the amount of discharge of indebtedness awarded to a claimant under section 332.74, subdivision 3, to be considered a subtraction for tax purposes. Additionally, the bill excludes these discharges from income calculations for property tax refunds and renter's income tax credits, with the effective date set for taxable years beginning after December 31, 2024.

Furthermore, the bill modifies section 290.0693 to redefine the "combined exemption amount" for taxpayers with dependents, detailing specific multipliers for each dependent. It also updates section 290A.03 to clarify what constitutes "income," explicitly excluding the amount of discharge of indebtedness awarded under the aforementioned section from taxable income. The effective date for these changes is set for property taxes payable in 2026. Overall, the bill aims to alleviate the tax burden on individuals who have experienced certain discharges of debt.

Statutes affected:
Introduction: 290.0132, 290.0693, 290A.03