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 initial brackets raised from $26,520 to $32,570 and from $32,650 to $40,100, respectively, along with corresponding increases in the upper brackets.

Additionally, the bill introduces an annual inflation adjustment for the tax brackets, which will be based on the changes in the rate brackets starting from the taxable year 2025. The adjustments will round the minimum and maximum dollar amounts for each rate bracket to the nearest $10, ensuring that any bracket ending in $5 is rounded up. The effective dates for these changes are set for taxable years 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