H.F. No. 300 - Summary

• Expands the Social Security benefits subtraction for Minnesota individual income tax by increasing maximum subtraction amounts from $5,150 to higher thresholds for joint filers and from $4,020 for single filers, effective for taxable years beginning after December 31, 2022.

• Establishes a new public pension income subtraction allowing taxpayers to exclude qualified public pension benefits based on a tiered federal and state exclusion system that phases out as provisional income increases.

• Defines "qualified benefits" as amounts received by pension plan members under Minnesota chapters 3A, 352B, 353, 354, or 354A, federal retirement systems, or reciprocal out-of-state public pension systems, provided the recipient is not also receiving Social Security benefits for the same service.

• Sets maximum state pension exclusions at $5,450 for joint returns, $2,725 for married separate returns, and $4,260 for other taxpayers, with phase-out beginning at income thresholds of $82,770, $41,385, and $64,670 respectively.

• Requires the commissioner to annually adjust all maximum subtraction and threshold amounts according to inflation using taxable year 2019 as the base year for Social Security benefits and 2022 for public pension income, with amounts rounded to the nearest $10.