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HF 347

Individual income tax subtraction expanded for military retirement pay.

2025-2026 Regular Session Introduced by Mary Franson and 2 co-sponsors

Minnesota bill expands tax subtraction for military retirement pay, reducing state income taxes owed by veterans and servicemembers.

Introduction and first reading, referred to Veterans and Military Affairs Division
#militaryandmilitaryaffairsdepartment #retirement #taxation-income
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Bill Summary · HF 347

Legislative bill overview

HF 347 expands Minnesota's individual income tax subtraction for military retirement pay, allowing servicemembers and veterans to exclude more of their retirement income from state income taxes. The bill was introduced in February 2025 and referred to the Veterans and Military Affairs Division for consideration.

Why is this important

Military retirement pay is a modest income stream for most veterans, and expanding tax exclusions directly increases their disposable income and financial security. This policy affects workforce retention decisions for active-duty personnel considering Minnesota residence and influences the state's competitiveness in attracting and retaining veterans post-service.

Potential points of contention

  • Revenue impact: Expanding the subtraction reduces state tax revenue; fiscal notes will clarify the annual cost and whether this strains the state budget
  • Scope questions: The bill's specifics on expansion level (full exclusion vs. partial increase, income thresholds, or phase-outs) are unclear without the full text and will determine who benefits
  • Equity concerns: Critics may question whether military retirement receives preferential tax treatment compared to other public employee pensions or civilian retirement income

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

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