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SF3767 (Legislative Session 94 (2025-2026))

Certain damage awards state subtraction authorization provision

Related bill: HF3611

AI Generated Summary

Purpose

  • This bill creates a Minnesota state income tax subtraction for damages awarded in two kinds of cases: (1) sexual harassment or abuse claims, and (2) injuries caused by activities of a federal agency enforcing immigration laws. The subtraction reduces a taxpayer’s Minnesota gross income by the amount of these damages if the damages would otherwise be taxable under federal law because they are not paid for personal physical injuries or physical sickness.

Main provisions

  • Establishes a new subdivision (Subd. 35.Damages for sexual harassment or abuse injuries from federal immigration enforcement) within Minnesota Statutes 2024 section 290.0132.
  • Defines “qualifying claim” as:
    • a sexual harassment or abuse claim, or
    • a claim arising from injuries caused by a federal agency conducting activities related to immigration enforcement (e.g., injuries tied to immigration enforcement actions).
  • Provides that the amount of damages received under a qualifying claim that would not be excluded from Minnesota gross income under Internal Revenue Code section 104(a)(2) (because the damages are not for personal physical injuries or physical sickness) is a subtraction from Minnesota gross income.
  • The subtraction applies to the amount of those damages, effectively exempting them from Minnesota taxation, even though they would be taxable under federal rules.

Significant changes to existing law

  • Adds a new tax subtraction to Minnesota’s individual income tax code specifically for damages from sexual harassment or abuse claims and from injuries related to federal immigration enforcement.
  • Expands the types of damages that can be subtracted from Minnesota gross income beyond typical physical injury cases to include certain non-physical injury damages tied to sexual harassment/abuse and immigration enforcement injuries.
  • No specific caps or limitations are stated in the text excerpt provided; the subtraction appears to be equal to the amount of qualifying damages that would otherwise be included in gross income under federal law.

Notes on terminology and scope

  • Key terms from the bill text include: subtraction, damages, sexual harassment, abuse, injuries, federal immigration enforcement, qualifying claim, gross income, Internal Revenue Code, IRC, and section 104(a)(2). The summary uses these terms directly and explains how they relate to the Minnesota subtraction.

Relevant Terms

  • subtraction
  • damages
  • sexual harassment
  • abuse
  • injuries
  • federal immigration enforcement
  • qualifying claim
  • gross income
  • Internal Revenue Code
  • IRC
  • 104(a)(2)
  • Minnesota Statutes 2024 section 290.0132
  • subdivision 35
  • Subd. 35.Damages for sexual harassment or abuse injuries from federal immigration enforcement

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 23, 2026SenateActionIntroduction and first reading
February 23, 2026SenateActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Adds a subtraction from gross income for damages received for sexual harassment or abuse injuries arising from federal immigration enforcement, under Minn. Stat. 2024, section 290.0132, subdivision 35.",
      "modified": []
    },
    "citation": "290.0132",
    "subdivision": "subd.35"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References the Internal Revenue Code section 104(a)(2) regarding gross income exclusion of damages in the described claim.",
      "modified": []
    },
    "citation": "26 U.S.C. § 104(a)(2)",
    "subdivision": ""
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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