HF3997

Purpose

• The bill creates a senior subtraction on Minnesota income tax. It allows taxpayers aged 65 or older to subtract the amount of income they receive during the taxable year from their taxable income. For married taxpayers filing jointly, if either spouse is 65 or older, the subtraction applies to that spouse’s income.

Main Provisions

• Adds a new subdivision (Subd. 40) to Minnesota Statutes 2024 section 290.0132, creating the “Senior subtraction.”
• Subdivision details:
  • a) For a taxpayer who attained age 65 or older during the taxable year, the amount of income they received during the year is a subtraction from their taxable income.
  • b) For a married taxpayer filing a joint return, if either spouse attained age 65 or older during the taxable year, the amount of income received by that taxpayer is a subtraction.
  • c) For this subdivision, “income” means any income included in adjusted gross income (AGI) or any amount required to be added to AGI under section 290.0131.
• Effective section: This is a new subtraction added to the existing law; no other changes to the law are described in the excerpt.

How it changes existing law

• Adds a new tax subtraction specifically for seniors, changing how income for 65+ taxpayers is treated on state tax returns.
• Expands eligibility to include married couples where at least one spouse is 65+ (joint returns).

Practical implications

• Potentially reduces taxable income for seniors by the amount of their income, which could lower state tax liability for eligible individuals.
• Could interact with other deductions and credits in unforeseen ways since it depends on the taxpayer’s actual income and AGI calculations.

Potential questions or uncertainties

• The bill text does not specify a cap or minimum/maximum subtraction amount beyond the worded rule, so the overall impact depends on each taxpayer’s income.
• How this interacts with other senior-specific credits or provisions is not shown in the excerpt.

Relevant Terms

• Senior subtraction
• income
• adjusted gross income (AGI)
• 65 or older
• taxable year
• married filing jointly
• section 290.0132
• Minnesota Statutes 2024
• section 290.0131