The House Taxes Committee has approved a bill, HF2757, to correct an error in the 2023 tax law. This error reduced the standard individual income tax deduction, reversing inflation adjustments made since 2019. This would have led to higher taxes for most Minnesota filers using the standard deduction. The bill, sponsored by Rep. Aisha Gomez, aims to adjust the standard deduction amounts for tax year 2023.
The bill also aims to match the definition of “Tribal Nation” in statewide local housing aid with the Tribal Nation aid program. It also allows a 0.625% local sales and use tax for Beltrami County, approved by voters in November. The bill passed the first committee meeting and is now with the House Ways and Means Committee.
The proposed changes would set the standard deduction amount for tax year 2023 at $27,650 for married joint or surviving spouse filers, $20,800 for head of household filers, and $13,825 for all other filers. Seniors or blind taxpayers would get an additional $1,450, or $1,850 for an unmarried taxpayer or a surviving spouse. The dependent standard deduction would be the higher of $1,200 or the individual’s earned income plus $350. These amounts would be adjusted for inflation from tax year 2024.