Minnesota House Republicans outline tax breaks for Social Security beneficiaries

On Wednesday, Minnesota House Republicans detailed a $1.35 billion dollar tax relief proposal — dubbed the “Come Together” tax relief plan.

Targeted at middle class Minnesotans, the proposal would provide credits, exemptions, and other tax relief measures for some of the most vulnerable and hard-working residents of the state: young adults struggling with student loans, farmers, families with young dependents, and Main Street businesses.

But the largest portion of funding alotted by this plan is intended for Minnesota’s seniors.  The plan is estimated to provide $269 million in tax relief to Social Security beneficiaries by raising the threshold at which Social Security income is subject to income tax.

Minnesota is one of 13 states that currently taxes Social Security benefits.  Current state law follows federal income taxing guidelines to tax benefits. For a single filer, Social Security benefits are excluded from taxable income up to a total provisional income of $25,000 (up to $32,000 for couples).  After that, beneficiaries are expected to pay a percentage of income taxes on their benefits based on their provisional income amount.

Minnesota House Representatives supporting the bill hope to ease the income tax burden on seniors by raising these income levels and providing significant income tax cuts to retirees — a huge boost for seniors living in a state known to be tax-unfriendly to retirees.

State Representative Greg Davids (R-Preston), sponsor of this bill, has said the House Taxes Committee will hold public hearings this week and expects a formal vote in the next several weeks.

For more information about the the “Come Together” tax relief bill, take a look at State Representative Davids’ newest press release about the proposal and this article over at Minnesota Public Radio News.