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 claimants to subtract the amount of discharge of indebtedness awarded under section 332.74, subdivision 3, from their taxable income. This provision is effective for taxable years beginning after December 31, 2024. Additionally, the bill modifies section 290.0693 to define a "combined exemption amount" based on the number of dependents and includes the discharge of indebtedness in the income calculations for property tax refunds and renter's income tax credits.

Furthermore, the bill amends section 290A.03 to clarify the definition of "income" by including the amount of discharge of indebtedness awarded under section 332.74, subdivision 3, as a non-includable item in federal adjusted gross income. The effective date for this section 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, thereby providing financial relief and promoting fairness in the tax system.

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