DFL senators proposed a tax bill including temporary rebate checks, child subsidies, and a lower Social Security benefit levy.
There are some similarities between the House plan up for a vote on Thursday and the proposal detailed to the Senate Tax Committee on Wednesday, but there are also significant variations.
Largest Tax Cut In Minnesota’s History
The Senate bill would provide $4 billion in tax credits and reductions over four years. The bill’s Democratic authors called it the state’s largest tax cut. Unlike a House measure, it would not raise Minnesota income taxes.
It would include a multinational corporation’s offshore earnings tax. The mechanism is estimated to earn $1.2 billion by 2027, despite legal hurdles and enforcement issues.
Monday is the Senate’s bill vote. On Thursday, the DFL-controlled House will vote on its plan. Negotiations will resolve to measure differences in the coming weeks.
Read more: Minnesota Democrats plan to raise taxes and spend heavily in their State budget
Property Tax Relief
Here are some of the most significant provisions of the Senate bill:
- 2021 Minnesotans earning up to $75,000 may receive a $279 tax credit. Dependent taxpayers can get $56 per child, up to three, for $1,218. State checks cost $1.1 billion. House budgets employ Senate income thresholds but differing refund rates.
- Low-income families would receive a child tax credit. Up to three disabled or under-18 children could earn $620 each. The four-year provision costs $1.1 billion.
- Childcare tax credits are available to couples earning up to $200,000, with the largest credits going to families with children under six. Credits would decrease for $160,000–$200,000 earners.
- Social Security benefits are tax-free for individuals earning $78,000 or couples earning $100,000. The idea would benefit 76% of Minnesota Social Security recipients. It matches a House tax proposal.
- Retirees with annual incomes under $120,000 can deduct up to $25,000 from their public pension and not pay federal income tax.
- Homeowners, farmers, and small resort owners may earn up to $2,000 if property taxes increased by more than 10% and $100 in a year.
Read more: SNAP Benefit payment in 2023: State-specific payment dates and processes for all 50 states