This bill amends Minnesota Statutes 2024, specifically section 290.06, to modify the income tax rates and brackets for individuals, estates, and trusts. For married individuals filing joint returns, the first income tax bracket is increased from $38,770 to $47,620, with subsequent brackets also adjusted upward, culminating in a new top bracket for income over $500,000 taxed at 12.45 percent. Similar adjustments are made for unmarried individuals and heads of household, with their respective first brackets increasing from $26,520 to $32,570 and from $32,650 to $40,100, among other changes. The bill also introduces a new top tax rate of 12.45 percent for incomes exceeding $250,000 for unmarried individuals and $400,000 for heads of household.

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 round the minimum and maximum dollar amounts for each rate bracket to the nearest $10, ensuring that the tax brackets reflect changes in economic conditions. The effective dates for these changes are specified as beginning after December 31, 2024, for the income tax rate modifications and after December 31, 2025, for the inflation adjustments.

Statutes affected:
Introduction: 290.06