SAINT PAUL, Minn. – Today, the House Taxes Committee held a public hearing on legislation authored by Rep. Dave Lislegard (DFL – Aurora) to fully exempt Social Security benefits from Minnesota’s state income tax. The legislation also makes a portion of public pension benefits exempt from state income tax.
“Minnesota seniors have worked hard and have made contributions to their communities and state their entire lives. As they enter their golden years, they deserve to do so with economic security, and eliminating taxes on Social Security benefits – benefits they’ve earned – is one step toward that reality,” Rep. Lislegard said. “As I talk to folks on the Iron Range, the Social Security tax is consistently one of the issues I hear about most frequently and passionately. A lack of fiscal resources is no longer a barrier to getting this done, and with a historic budget surplus, we should finish last year’s bipartisan work and eliminate this tax once and for all.”
Minnesota is one of only twelve states to tax Social Security benefits, impacting roughly 348,700 seniors. In recent years, there has been incremental progress toward eliminating the tax, including the creation of the income-based Minnesota Social Security Subtraction in 2017. Rep. Lislegard’s bill would expand this subtraction, allowing Minnesotans to subtract the full amount of their taxable Social Security benefits.
Additionally, Rep. Lislegard’s legislation establishes an income tax subtraction for a portion of certain public pension benefits. The subtraction applies to those enrolled in state or federal pension plans with benefits for which the worker also didn’t earn Social Security benefits.
The committee will continue discussion of the bill on Tuesday. Documents from the hearing are available on the committee webpage and video is available on House Public Information Services’ YouTube page.