Bill > SF4

This bill expands the tax subtraction for military retirement pay in Minnesota by providing more detailed guidelines for how military retirement income can be deducted from state income taxes. Under the proposed changes, individuals can now subtract three types of military-related retirement payments: (1) military service pensions computed under specific federal code sections, (2) federal employee retirement system pensions proportional to their military service years, and (3) civil service retirement system pensions also proportional to their military service years. The bill introduces a precise definition of "military service ratio" which calculates the deduction by dividing the years of military service by total service years. The subtraction is only available to individuals who are not already claiming a different military-related tax credit, and the effective date for these changes is for taxable years beginning after December 31, 2024. This legislation aims to provide more generous and nuanced tax treatment for military retirees by allowing them to subtract a more comprehensive range of military retirement income from their state taxes.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=Senate&f=SF0004&ssn=0&y=2025