HF 3847 Summary

• Allows Minnesota individual income taxpayers to subtract Social Security benefits from federal taxable income to the extent included, with the subtraction reduced by provisional income over threshold amounts ($70,000 for married couples filing jointly and surviving spouses; $54,000 for all other filers).

• Defines "provisional income" as modified adjusted gross income plus one-half of Social Security benefits received during the taxable year, using federal Internal Revenue Code section 86(b)(2) as the basis.

• Requires the Minnesota tax commissioner to adjust income thresholds annually for inflation using the percentage change in the Consumer Price Index from August 31, 2015 to August 31 of the year preceding the taxable year, with thresholds rounded to the nearest $100.

• Applies to taxable years beginning after December 31, 2015, with the stated purpose of offsetting the effect of inflation on federal income thresholds used to determine Social Security taxation.

• Makes conforming amendments to Minnesota Statutes section 290.091, subdivision 2, to account for the new Social Security subtraction in alternative minimum tax calculations.