MN HF865

Creates a phased-in tax subtraction for income from Minnesota public pension plans (governed by chapters 3A, 352B, 353, 354, and 354A) and federal retirement systems, starting at 10 percent for tax years 2019-2020 and increasing by 10 percentage points annually until reaching 100 percent.

Limits the subtraction to pension income not also receiving Social Security benefits and extends eligibility to survivors of basic plan members.

Permits subtraction of benefits from other states' public retirement systems if those states allow reciprocal deductions for Minnesota public pension benefits.

Modifies the alternative minimum tax definition to include the public pension income subtraction as an allowable deduction under Minnesota Statutes section 290.0132, subdivision 27.

Effective for taxable years beginning after December 31, 2018.