Bill > HF2591

This bill modifies Minnesota's individual income tax structure by adding a fifth tax tier for high-income earners and linking the new tier's tax rate to potential federal Medicaid funding changes. Specifically, the bill increases income tax brackets for married joint filers, unmarried individuals, and heads of household, raising the thresholds at which different tax rates apply. For example, the first tax bracket for married joint filers would increase from $38,770 to $47,620. The bill introduces a new fifth tier for very high-income earners: individuals filing jointly would pay a new tax rate on income over $1,667,000, unmarried individuals on income over $1,000,000, and heads of household on income over $1,334,000. Crucially, the bill requires the commissioner of revenue to calculate this new tier's tax rate based on an estimate of lost federal Medicaid funds, which will be certified by the commissioner of management and budget. This rate determination will consider executive actions and federal legislative changes affecting Medicaid funding after January 20, 2025. The new tax structure and fifth tier would be effective for taxable years beginning after December 31, 2024, and the tax rate calculation method would remain in effect for subsequent tax years. The bill aims to create a mechanism to offset potential reductions in federal Medicaid funding through targeted income tax adjustments.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF2591&ssn=0&y=2025