1.1.................... moves to amend H.F. No. 2434, the second engrossment, as follows:
1.2Page 233, after line 29, insert:


1.5    Section 1. Minnesota Statutes 2024, section 290.06, subdivision 2c, is amended to read:
1.6    Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income taxes
1.7imposed by this chapter upon married individuals filing joint returns and surviving spouses
1.8as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
1.9their taxable net income the following schedule of rates:
1.10    (1) On the first $38,770 $47,620, 5.35 percent;
1.11    (2) On all over $38,770 $47,620, but not over $154,020 $189,180, 6.8 percent;
1.12    (3) On all over $154,020 $189,180, but not over $269,010 $330,410, 7.85 percent;
1.13(4) On all over $269,010 $330,410, but not over $1,667,000, 9.85 percent; and
1.14(5) On all over $1,667,000, the percentage determined under paragraph (g).
1.15    Married individuals filing separate returns, estates, and trusts must compute their income
1.16tax by applying the above rates to their taxable income, except that the income brackets
1.17will be one-half of the above amounts after the adjustment required in subdivision 2d.
1.18    (b) The income taxes imposed by this chapter upon unmarried individuals must be
1.19computed by applying to taxable net income the following schedule of rates:
1.20    (1) On the first $26,520 $32,570, 5.35 percent;
1.21    (2) On all over $26,520 $32,570, but not over $87,110 $106,990, 6.8 percent;
1.22    (3) On all over $87,110 $106,990, but not over $161,720 $198,630, 7.85 percent;
2.1(4) On all over $161,720 $198,630, but not over $1,000,000, 9.85 percent; and
2.2(5) On all over $1,000,000, the percentage determined under paragraph (g).
2.3    (c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
2.4a head of household as defined in section 2(b) of the Internal Revenue Code must be
2.5computed by applying to taxable net income the following schedule of rates:
2.6    (1) On the first $32,650 $40,100, 5.35 percent;
2.7    (2) On all over $32,650 $40,100, but not over $131,190 $161,130, 6.8 percent;
2.8    (3) On all over $131,190 $161,130, but not over $214,980 $264,050, 7.85 percent;
2.9(4) On all over $214,980 $264,050, but not over $1,334,000, 9.85 percent; and
2.10(5) On all over $1,334,000, the percentage determined under paragraph (g).
2.11    (d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
2.12of any individual taxpayer whose taxable net income for the taxable year is less than an
2.13amount determined by the commissioner must be computed in accordance with tables
2.14prepared and issued by the commissioner of revenue based on income brackets of not more
2.15than $100. The amount of tax for each bracket shall be computed at the rates set forth in
2.16this subdivision, provided that the commissioner may disregard a fractional part of a dollar
2.17unless it amounts to 50 cents or more, in which case it may be increased to $1.
2.18    (e) An individual who is not a Minnesota resident for the entire year must compute the
2.19individual's Minnesota income tax as provided in this subdivision. After the application of
2.20the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
2.21by a fraction in which:
2.22    (1) the numerator is the individual's Minnesota source federal adjusted gross income as
2.23defined in section 62 of the Internal Revenue Code and increased by:
2.24    (i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, 17, 19,
2.25and 20, and 290.0137, paragraph (a); and reduced by
2.26    (ii) the Minnesota assignable portion of the subtraction for United States government
2.27interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
2.28subdivisions 9, 10, 14, 15, 17, 18, 27, 31, and 32, and 290.0137, paragraph (c), after applying
2.29the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
2.30    (2) the denominator is the individual's federal adjusted gross income as defined in section
2.3162 of the Internal Revenue Code, increased by:
3.1    (i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, 17, 19,
3.2and 20, and 290.0137, paragraph (a); and reduced by
3.3    (ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, 27,
3.431, and 32, and 290.0137, paragraph (c).
3.5(f) If an individual who is not a Minnesota resident for the entire year is a qualifying
3.6owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
3.77a, paragraph (b), the individual must compute the individual's Minnesota income tax as
3.8provided in paragraph (e), and also must include, to the extent attributed to the electing
3.9qualifying entity:
3.10(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
3.11addition under section 290.0131, subdivision 5; and
3.12(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
3.13subtraction under section 290.0132, subdivision 3.
3.14(g) For taxable years beginning after December 31, 2024, and before January 1, 2027,
3.15the commissioner of revenue must calculate the tax rate that applies under paragraphs (a),
3.16clause (5); (b), clause (5); and (c), clause (5). The commissioner must set the rate at the
3.17level the commissioner estimates would be necessary to raise an amount of revenue in fiscal
3.18years 2026 and 2027 equal to the amount lost due to federal policy changes, as certified by
3.19the commissioner of management and budget under section 3. The rate established by the
3.20commissioner for taxable years beginning after December 31, 2024, and before January 1,
3.212027, remains in effect for taxable years beginning after December 31, 2026.
3.22EFFECTIVE DATE.This section is effective for taxable years beginning after December
3.2331, 2024.

3.24    Sec. 2. Minnesota Statutes 2024, section 290.06, subdivision 2d, is amended to read:
3.25    Subd. 2d. Inflation adjustment of brackets. The commissioner shall annually adjust
3.26the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed
3.27in subdivision 2c, except the fifth tier under paragraphs (a), clause (5); (b), clause (5); and
3.28(c), clause (5), as provided in section 270C.22. The statutory year is taxable year 2019 2025.
3.29The rate applicable to any rate bracket must not be changed. The dollar amounts setting
3.30forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate brackets
3.31as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in $5, it
3.32must be rounded up to the nearest $10 amount. The commissioner shall determine the rate
4.1bracket for married filing separate returns after this adjustment is done. The rate bracket
4.2for married filing separate must be one-half of the rate bracket for married filing joint.
4.3EFFECTIVE DATE.This section is effective for taxable years beginning after December
4.431, 2025.

4.5    Sec. 3. COMMISSIONER OF MANAGEMENT AND BUDGET TO ESTIMATE
4.6FEDERAL FUNDING LOSS.
4.7(a) No later than December 31, 2025, the commissioner of management and budget must
4.8calculate and certify to the commissioner of revenue an estimate of the total net change in
4.9federal Medicaid revenues received by the state in fiscal years 2026 and 2027 relative to
4.10the amount anticipated in the governor's budget that is the result of:
4.11(1) executive actions implemented on or after January 20, 2025, including but not limited
4.12to executive orders, changes to administrative rules, and changes to other administrative
4.13guidance; and
4.14(2) changes to federal law or administrative rules enacted by the 119th Congress.
4.15(b) The commissioner of revenue must use the amount certified under this section to
4.16calculate the rate for the fifth tier of the individual income tax, as provided in Minnesota
4.17Statutes, section 290.06, subdivision 2c, paragraph (g).
4.18(c) For the purposes of this section, "governor's budget" means the budget submitted to
4.19the legislature under Minnesota Statutes, section 16A.11, for fiscal years 2026 and 2027."
4.20Amend the title accordingly