MN HF2763

Replaces the fixed $150,000 exclusion for disabled veterans with a service-connected disability rating of 70 percent or more with a formula-based exclusion equal to $300,000 times the disability rating percentage.

Eliminates the separate $300,000 exclusion for 100 percent disabled veterans, consolidating the benefit under the new percentage-based formula.

Allows surviving spouses of veterans with 100 percent disability ratings to claim the exclusion for 8 additional tax years after the veteran's death or until the spouse remarries or sells the property, whichever comes first.

Extends the same exclusion benefits to surviving spouses of service members who die from service-connected causes while on active duty, treating them as if the deceased had a 100 percent disability rating for 8 tax years.

Effective beginning with taxes payable in 2017.