Bill > SF2867

This bill establishes a new fifth tier of individual income tax in Minnesota designed to offset potential losses in federal Medicaid funding. The bill modifies existing tax brackets for married joint filers, unmarried individuals, and heads of household by increasing the income thresholds for existing tax rates and adding a new top tax bracket for high-income earners. Specifically, it creates a fifth tier for married joint filers with income over $1,667,000, unmarried individuals with income over $1,000,000, and heads of household with income over $1,334,000. The tax rate for this new top tier will be determined by the commissioner of revenue, who must calculate a rate that would raise revenue equivalent to the estimated federal Medicaid funding loss. The commissioner of management and budget is required to calculate the potential federal funding loss by December 31, 2025, based on executive actions and legislative changes after January 20, 2025. The new tax structure would be effective for taxable years beginning after December 31, 2024, with the top-tier rate remaining in effect for subsequent years. This bill aims to provide a fiscal mechanism to address potential reductions in federal Medicaid funding by creating a targeted tax increase on high-income earners.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=Senate&f=SF2867&ssn=0&y=2025