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HF 860

Income tax subtraction of back pay allowed for military members discharged due to the military's COVID-19 vaccination mandate.

2025-2026 Regular Session Introduced by Chris Swedzinski

The bill allows a Minnesota individual income tax subtraction for back pay paid to military members discharged due to the COVID-19 vaccination mandate.

Introduction and first reading, referred to Taxes
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Bill Summary · HF 860

Summary of HF 860 (2025-2026) - Minnesota

Title

Income tax subtraction of back pay allowed for military members discharged due to the military's COVID-19 vaccination mandate

Purpose and intent

HF 860 would provide a targeted tax benefit for certain military members who were discharged as a result of the U.S. military’s COVID-19 vaccination mandate. Specifically, the bill authorizes an individual income tax subtraction (exemption) for back pay received by these service members, reducing their Minnesota taxable income for the tax year in which the back pay is received.

Key goal: to alleviate state tax liability for veterans who faced discharge linked to vaccination requirements and subsequently received back pay from the military.

Key provisions and changes

  • Subtraction of back pay from income tax: The bill creates a new subtraction (exemption) from Minnesota individual income for back pay that is paid to military members who were discharged due to the COVID-19 vaccination mandate.

  • Scope of eligible recipients: The subtraction would apply specifically to service members who were discharged as a result of the military’s COVID-19 vaccination mandate. The bill does not appear to broaden eligibility beyond those discharged under that mandate.

  • Tax year applicability: The exact tax year(s) for which the subtraction can be claimed would be defined in the bill text (not provided in the summary). Typically, such back pay would be received in a particular year, and the subtraction would be claimed on the state return for that year or possibly subsequent years as specified.

  • Interaction with existing law: The proposed subtraction would operate alongside existing Minnesota income tax provisions. It would reduce Minnesota taxable income by the amount of eligible back pay, thereby reducing state income tax liability accordingly.

  • Non-refundability and limitations: As a standard state income tax subtraction, the benefit would generally be non-refundable and may be subject to other limitations or phase-ins/outs as defined in statute (e.g., itemized vs. standard deduction mechanics, overall tax liability constraints). The specific limitations would be detailed in the legislative text.

Who would be affected

  • Eligible individuals: Minnesota-sourced residents who are military members discharged due to the COVID-19 vaccination mandate and who receive back pay from the military.
  • Taxpayers benefiting: These individuals would see a reduction in their Minnesota taxable income for the year in which the back pay is received, potentially lowering their state income tax bill.

Procedural and timeline aspects

  • Legislative path: HF 860 was introduced and referred to the Taxes committee on February 17, 2025.
  • Next steps: The bill would require committee deliberation, potential amendments, and eventual floor votes in the Minnesota House. If passed, it would then move to the Senate and, subject to passage there, head to the governor for signature.

Notes

  • The summary above reflects the stated aims based on the bill title and introductory action. The full text would specify eligibility details, calculation methods, any caps or exclusions, filing instructions, and effective dates.
  • As drafted, the measure targets a narrow cohort affected by a specific federal policy, tailoring state tax relief to that group.

If you’d like, I can pull the full bill text and provide a line-by-line breakdown of the exact statutory language, eligibility criteria, and any anticipated fiscal impact notes.

Compiled from official sources — confirm details with the bill’s official record.

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