MN SF1162

Reduces all Minnesota individual income tax rates by one percentage point across four tax brackets for married joint filers, unmarried individuals, and heads of household, effective for taxable years beginning after December 31, 2022.

Updates income bracket thresholds for married joint filers (first bracket from $38,770 to $43,950), unmarried individuals (first bracket from $26,520 to $30,070), and heads of household (first bracket from $32,650 to $37,010), with corresponding adjustments to higher brackets.

Implements a two-year phase-in period with higher rates: taxable years 2023 applies rates 0.5 percentage points higher than the target rates, and taxable year 2024 applies rates 0.25 percentage points higher than target rates.

Changes the statutory year for inflation adjustments of tax brackets from taxable year 2019 to taxable year 2023, effective for taxable years beginning after December 31, 2023.

Applies to Minnesota residents for the entire year and includes provisions for part-year residents calculating tax liability based on Minnesota source income as a fraction of federal adjusted gross income.