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 for married individuals filing jointly decreasing from 9.85% to 8.85%.

Additionally, the bill introduces provisions for future adjustments to tax rates for taxable years beginning after December 31, 2024, and before January 1, 2026, as well as for the years following until 2027. These adjustments will incrementally increase the tax rates back up from the proposed reductions. The bill also amends subdivision 2d to establish an annual inflation adjustment for the tax brackets, with the statutory year for this adjustment set to 2025. 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 starting after December 31, 2025.

Statutes affected:
Introduction: 290.06