ST. PAUL – The Minnesota House on Wednesday approved the conference committee report of a tax bill providing $1.15 billion in relief over the next two years, including a $218 million reduction on the state tax on Social Security income.
“Reducing the tax on social security retirement benefits will help right a wrong that has been taking place in our state,” said Rep. Dale Lueck, R-Aitkin. “Minnesota is one of just a handful of states that fully taxes social security retirement pensions and this bill will help seniors. It also will help families who use child care, farmers, Main Street businesses, college students and others. This is a good bill and I am pleased to support it.”
Highlights of the bill (H.F. 4) include:
- $218 million in relief for Minnesota’s senior citizens by increasing the income limit thresholds for the taxation of social security income.
- More than $70 million to address college affordability through a first-in-the-nation tax credit for student loan payments, along with subtractions and credits for families saving for college using 529 Savings Plans. 65,000 students will receive an average of a $414 reduction in their taxes through a tax credit for student loan payments.
- $35 million in relief for farmers by reducing the burden farmers and agriculture land owners pay for school bond referendums. Approximately 240,000 farmers could receive property tax relief to reduce their disproportionate share of school district debt service.
- $36 million for families with young children by modifying the child and dependent care credit. A family of four making $50,000 a year will receive an additional $1,200 towards their child care expenses.
- $126 million in relief for hometown businesses by exempting the first $150,000 in property value from the extra tax on businesses and freezing its automatic inflator.