The Senate recently passed a tax conformity bill, bringing Minnesota in line with recent federal tax changes and cutting tax collections by more than $100 million, said Senator Julia Coleman (R-Waconia). The bill was passed with bipartisan support and is headed to the governor’s desk for his signature.  

“The Senate’s passage of the federal tax conformity demonstrates that important bipartisan agreement can be found to improve the lives of Minnesotans,” Senator Coleman said. “After years of COVID shutdowns and resulting economic strife, working families, retirees and small businesses face unpredictable financial futures. This meaningful tax relief is an early session victory that will keep more hard-earned money in the pockets of Minnesotans.”

The bill aligns the Minnesota tax code with Federal tax changes that resulted in many tax changes, including: The Coronavirus Aid, Relief, and Economic Security (CARES) Act from 2020, The American Rescue Plan (ARPA) Act from 2021, and The Inflation Reduction Act (IRA) from 2022. 

Notable provisions in the bill:  

• Expand eligible expenses to college savings accounts through Section 529 plans 
• Exclude shuttered venue operator grants from being counted as income 
• Allows for student loan payments by employers 
• Increases the amount a business can provide for employee child care benefits 

Missing from the bill is the elimination of the tax on Social Security, or any reduction in personal income taxes. Senate Republicans tried to amend these changes to the bill, but Democrats opposed the move through parliamentary procedure.