Bill > SF952

This bill modifies Minnesota's tax treatment of Social Security benefits by creating a gradual phase-out and increasing the percentage of Social Security income exempt from state taxes over time. Currently, the state allows a simplified subtraction of taxable Social Security benefits with income-based reductions, and this bill introduces a new "second alternate subtraction" that will incrementally increase the tax exemption for Social Security income. Specifically, the bill establishes a sliding scale where the exemption starts at 10% for the 2025 tax year and increases by 10% each year until reaching 100% exemption in the 2034 tax year. The bill maintains existing provisions for phaseout thresholds based on adjusted gross income for different filing statuses (joint, single, head of household, and separate), ensuring that higher-income taxpayers will still have some reduction in their Social Security income tax exemption. The changes are designed to provide increasing tax relief for seniors and retirees receiving Social Security benefits, with the full implementation of 100% exemption scheduled for the 2034 tax year. The bill will take effect for taxable years beginning after December 31, 2024.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=Senate&f=SF0952&ssn=0&y=2025