This bill proposes amendments to Minnesota Statutes 2024, specifically section 290.06, to reduce individual income tax rates by one percentage point across various income brackets. The changes include adjustments to the income thresholds for tax rates applicable to married individuals filing jointly, unmarried individuals, and heads of household. For instance, the first income bracket for married individuals filing jointly is adjusted from $38,770 to $47,620, with the corresponding tax rate decreasing from 5.35% to 4.35%. Similar adjustments are made for other income brackets, with the highest rate dropping from 9.85% to 8.85%.

Additionally, the bill introduces provisions for future adjustments to tax rates based on inflation for taxable years beginning after December 31, 2024, and 2025. The rates will be modified to reflect these adjustments, with specific percentages outlined for each income bracket. The bill also amends subdivision 2d to establish a new statutory year for inflation adjustments, changing it from 2019 to 2025. The adjustments will ensure that the tax brackets are rounded to the nearest $10, with specific rules for rounding up when necessary. The effective dates for these changes are set for taxable years beginning after December 31, 2024, and 2025, respectively.

Statutes affected:
Introduction: 290.06