Bill > HF347

This bill expands the tax subtraction for military retirement pay in Minnesota by modifying the existing law to provide more detailed provisions for calculating tax deductions. Specifically, the bill allows taxpayers to subtract three types of military-related pension income: (1) compensation computed under specific U.S. military pension calculation codes, (2) federal employee retirement system pensions prorated by the taxpayer's military service ratio, and (3) civil service retirement system pensions also prorated by the military service ratio. The "military service ratio" is defined as the years of military service credited divided by total service years, calculated separately for different pension systems. The bill clarifies that taxpayers cannot claim both this subtraction and a separate military service credit, and provides specific instructions for how the ratio should be calculated, excluding fractional months. The changes will apply to taxable years beginning after December 31, 2024, giving taxpayers and tax authorities time to prepare for the new calculation method. The goal appears to be providing more precise and potentially more generous tax treatment for military retirees' pension income.

Military Affairs and Security

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF0347&ssn=0&y=2025