HF760 would amend Minnesota’s individual income tax law to allow an unlimited subtraction for Social Security benefits. Under current law, Minnesota taxpayers can subtract some or all taxable Social Security benefits from state taxable income using a simplified subtraction or an alternate subtraction subject to income-based phaseouts and maximum dollar limits. This bill removes those limits by changing the statute so that the amount of Social Security benefits received is a subtraction, effectively allowing taxpayers to exclude all taxable Social Security benefits from Minnesota income tax beginning with tax year 2025.
The bill keeps the existing statutory framework in place for determining the subtraction, but the practical effect is to eliminate the cap on the benefit. It retains definitions, phaseout mechanics, and inflation adjustments in the statute, while overriding the prior maximum-subtraction structure by stating that Social Security benefits received are a subtraction. The bill applies prospectively to taxable years beginning after December 31, 2024.
Impact
HF760 would reduce Minnesota taxable income for taxpayers receiving Social Security benefits and likely lower state income tax liability for many retirees and other beneficiaries. It amends Minnesota Statutes section 290.0132, subdivision 26, which governs the Social Security subtraction, and would supersede the current capped subtraction amounts and income phaseouts by allowing an unlimited subtraction. The bill would primarily affect individual income tax filers, especially older Minnesotans and households with Social Security income.
Sentiment
The available record shows the bill was introduced and referred to the House Taxes Committee, but there are no committee transcripts or recorded votes included here. Based on the bill’s caption and structure, the measure appears to be a tax relief proposal aimed at Social Security recipients, which generally suggests favorable intent toward retirees and middle-income taxpayers. However, no formal sentiment from debate or voting history can be determined from the provided materials.
Contention
The main policy issue is whether Minnesota should fully exempt Social Security benefits from state income tax or continue using income-based limits and phaseouts. Supporters would likely view the bill as tax relief for retirees and a way to reduce taxation on fixed incomes, while opponents could raise concerns about state revenue loss and whether the benefit should be targeted to lower- and middle-income taxpayers rather than made unlimited. Because no discussion transcripts or votes are provided, specific member positions or committee disagreements cannot be identified.