ST. PAUL – House Republicans have unveiled a package of significant tax cuts for Minnesota families using the state’s $1.5 billion budget surplus.
Rep. Chris Swedzinski, R-Ghent, said the time is right to provide Minnesotans with tax relief.
“This is an opportunity for us to provide tax relief to virtually all Minnesotans across the board, especially senior citizens,” Swedzinski said. “It is shameful that our state has been an outlier in taxing social security, and it is time to put an end to that once and for all. We also have a great chance to fix the Section 179 tax code problem that has left farmers and businesses with unexpected tax bills in the tens of thousands of dollars.”
The House Republican proposal provides relief to a wide swath of Minnesotans, from seniors to farmers, homeowners, Main Street businesses, college graduates with student loan debt, families with kids in childcare and beyond.
In total, the package Republicans put forward Monday provides approximately $1 billion in tax relief. This includes:
- Eliminating state taxes on social security benefits. House Republicans successfully pushed to eliminate social security taxes for 250,000-plus Minnesotans in 2017, this provision would finish that effort and eliminate social security taxes entirely.
- Childcare Tax Credit. Republicans are seeking to help families dealing with high childcare expenses by increasing the income threshold for the dependent care credit from the current cap of $52,160 to $75,000 making thousands more families eligible for assistance paying childcare bills.
- Doubling the student loan tax credit. House Republicans helped create the first-ever student loan tax credit of up to $500 for college graduates making payments on their loans. The new proposal would double that credit to $1,000.
- Tax Fairness for Farmers and Main Street Businesses. Last session’s failure to enact full Section 179 conformity is causing massive unexpected tax bills for farmers and businesses. House Republicans are proposing to fully conform and make it retroactive so farmers and businesses are not stuck with tax bills many simply cannot afford.
- Property Tax Relief. By putting an additional $50 million into school equalization aid, this would effectively result in a property tax cut for Minnesota homeowners by reducing reliance on local property tax revenue.
- Increasing the Personal Exemption. Every Minnesotan would benefit from an approximately $1,300 increase to the personal exemption.
Senate Republicans announced their “Get Your Billion Back” tax plan earlier this year, while House Democrats and Gov. Tim Walz have remained mum on whether they will put forward a tax cut bill this session.