Bill > HF385

This bill modifies Minnesota tax law to provide a tax subtraction for certain discharges of indebtedness, specifically those awarded to a claimant under section 332.74, subdivision 3, which appears to relate to coerced debt. The bill makes changes to three different sections of Minnesota tax statutes, affecting individual income tax, property tax refunds, and income calculations. It creates a new tax subtraction for discharged indebtedness, which means that when certain debts are forgiven or discharged, the amount of that discharged debt will not be counted as taxable income. The bill also adjusts how dependent exemptions are calculated for income tax purposes, creating a "combined exemption amount" that varies based on the number of dependents and provides additional exemptions for taxpayers with disabilities or who are 65 and older. Additionally, the legislation excludes the specified discharge of indebtedness from income calculations for property tax refunds and renter's income tax credits. These changes will be effective for taxable years beginning after December 31, 2024, with the property tax provisions becoming effective for taxes payable in 2026, potentially providing financial relief for taxpayers who have had certain debts discharged.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF0385&ssn=0&y=2025