Yesterday the Senate passed a tax conformity bill, bringing Minnesota in line with recent federal tax changes and cutting tax collections by more than $100 million. The bill was passed with bipartisan support and is headed to the Governor’s desk for his signature.  

“We have folks all across the state desperately pleading for tax relief—it’s an urgent need that voters expect us to get done,” said Senator Zach Duckworth (R-Lakeville). “Today we offered improvements to the bill that would have eliminated the tax on social security benefits and reduced the first tier of Minnesota’s income tax. I am disappointed that we could not get our colleagues across the aisle to join us in prioritizing immediate tax relief for those in need. The state is sitting on a near $18 billion surplus, and we need to take swift action to help those in need. It’s time to address the problem and take care of Minnesota families by providing meaningful tax relief. I’ll continue working to keep my promise and pass relief for families all across our state and I invite my colleagues and the Governor to join me in making it a priority so that we can get it done immediately.”

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. 

Provisions included 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 

Notably missing from the bill is the elimination of the tax on Social Security, or any reduction in personal income tax rates. Senate Republicans attempted to amend these changes into the bill but were struck down by Senate Democrats.