Social Security BenefitsAllows a subtraction for an amount of Social Security benefits, up to a maximum amount. The maximum subtraction is $4,500 for married couples filing joint returns, $3,500 for single and head of household filers, and $2,250 for married couples filing separate returns. The subtraction is reduced by 20 percent of provisional income over a threshold; the threshold is $77,000 for married couples filing joint returns, $60,200 for single and head of household filers, and $38,500 for married couples filing separate returns.
529 College Savings Plan & Student Loans
A new nonrefundable tax credit is available to Minnesotans who contribute to a 529 college savings plan. It is capped at $500 and starts to be phased out at adjusted gross incomes for married couples over $75,000 and is phased out at incomes over $160,000. A new 529 plan deduction for contributions to any 529 college savings plans (for those who don’t claim the credit) of up to $3,000 for a married couple. A new nonrefundable student loan payment tax credit of up to $500, depending on the individual’s income and loan payments.
State Dependent Care Credit
Increases the state dependent care credit to equal the federal credit for taxpayers with adjusted gross incomes up to $50,000.
Increases the amount exempt from Minnesota estate tax from $2 million to $3 million in four steps with the maximum $3 million reached in 2020. NOTE – this provision is one that the Governor wants to repeal. Read more.
As always, don’t hesitate to check with us or your tax preparer for more information about any tax strategies. For more information about Minnesota law changes visit: https://www.revisor.mn.gov/laws/