HF 866 Summary

• Allows Minnesota taxpayers to subtract income from certain public pension plans and federal retirement systems from their state income tax, provided the income is not also subject to Social Security benefits.

• Applies to basic members of Minnesota pension plans governed by chapters 3A, 352B, 353, 354, or 354A, federal retirement systems, and reciprocal public retirement systems from other states.

• Subtraction amounts are income-tiered: 100% for those with modified adjusted gross income below $34,001 (joint filers) or $25,001 (individual filers); phasing down to 50% and then 15% at higher income thresholds.

• Includes public pension income in alternative minimum taxable income calculations for the state's minimum tax imposed under Minnesota Statutes section 290.091.

• Effective for taxable years beginning after December 31, 2018.