This bill proposes amendments to Minnesota Statutes 2024, specifically section 290.06, to reduce individual income tax rates across various income brackets. The changes include increasing the income thresholds for tax brackets for married individuals filing jointly, unmarried individuals, and heads of household, while simultaneously lowering the tax rates applied to these brackets. For instance, the first income threshold for married individuals filing jointly is raised from $38,770 to $47,620, with the corresponding tax rate reduced from 5.35% to 5.225%. Similar adjustments are made for other income categories, with the highest tax rate decreasing from 9.85% to 9.725%.

Additionally, the bill includes provisions for annual inflation adjustments to the tax brackets, with the statutory year for these adjustments set to 2025. The adjustments will ensure that the minimum and maximum dollar amounts for each tax rate bracket are updated to reflect inflation, rounded to the nearest $10. The effective dates for these changes are specified, with the new tax rates taking effect for taxable years beginning after December 31, 2024, and the inflation adjustments effective for taxable years beginning after December 31, 2025.

Statutes affected:
Introduction: 290.06