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HF 2081

Unlimited Social Security income tax subtraction provided.

2025-2026 Regular Session Introduced by Keith Allen and 3 co-sponsors

Minnesota bill allowing residents to subtract unlimited Social Security income from state taxes, reducing retiree tax burden but potentially decreasing state revenue.

Author added Bakeberg
#seniorcitizens #taxation-income
0
WeVote Research Nonpartisan
Bill Summary · HF 2081

Legislative bill overview

HF 2081 would allow Minnesota residents to subtract unlimited amounts of Social Security income from their state taxable income. Currently, Minnesota allows a partial subtraction of Social Security benefits. This bill would expand that provision to exclude all Social Security income from state taxation.

Why is this important

Social Security is a primary income source for many Minnesota retirees. This change would reduce state income tax liability for seniors receiving these benefits, potentially affecting state revenue and the progressivity of Minnesota's tax system. It could meaningfully improve after-tax income for retired individuals, particularly those with lower incomes who currently pay state taxes on benefits.

Potential points of contention

  • State revenue impact: Eliminating Social Security taxation could reduce state general fund revenue, requiring cuts elsewhere or tax increases on other groups to maintain current spending levels
  • Equity concerns: This primarily benefits retirees over working-age taxpayers; critics may argue it shifts tax burden away from a wealthy demographic group (older homeowners) toward younger workers and families
  • Interaction with federal policy: Social Security taxation varies based on total income; unlimited state subtraction may create complex interactions with federal tax calculations and create unequal treatment among seniors with identical incomes but different income sources

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

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