Ruud, Senate Pass Biggest Tax Cut Ever to Provide Financial Relief Across the State

With inflation reaching its highest point in nearly 40 years, working Minnesotans are being pressured more every day by soaring prices for gas, groceries, and energy. Senate Republicans today made good on an early session promise to give back Minnesota’s historic $9 billion budget surplus with the largest permanent tax cut in state history.

The Senate today passed a landmark tax cut bill that reduces the first-tier tax rate for all filers from 5.35% to 2.80%, and fully eliminates the state income tax on all Social Security benefits. The bill provides taxpayers with a staggering $8.43 billion in relief over the next three years.

“Working Minnesotans across our state have been vocal about the need for lower taxes and the elimination of social security income taxes, and our $9 billion surplus is proof that working families are consistently over-taxed,” said Senator Carrie Ruud (R-Breezy Point). “I’ve carried the bill to end the social security income tax since 2013, because our seniors deserve better—they should be able to retire in our state without paying taxes on income they’ve already paid taxes on. Today’s bill affirms our commitment to lower taxes, financial relief, and an end to the outdated tax on social security benefits.”  

  • Reducing the first-tier tax rate: Minnesota’s lowest tax bracket is higher than the highest tax bracket in 24 other states. Over 2.4 million filers would benefit from the historic Republican tax rate cut, with an average savings of $759. A typical family making $100,000 would see a savings of $1,064.
  • Full elimination of the tax on Social Security income: Minnesota is one of just 13 states that tax Social Security benefits. Impacting taxpayers with just $25,000 in income, the Social Security Income tax hits more than 407,000 Minnesota filers. None of the states that border us — Iowa, Wisconsin, Michigan, and South Dakota — tax Social Security income. Eliminating the Social Security tax would put $1.6 billion back into the hands of beneficiaries, with an average benefit of $1,254.

Republicans passed billions in tax cuts in the last five years, stopped Gov. Walz’s massive tax increases, and passed the first income rate tax cuts in 20 years. Today’s bill passage signals an effort to continue meaningful and permanent tax relief.