Says $4 Billion in Tax Cuts Includes $1 Billion in Tax Rebates, $1.24 Billion Cut in Social Security Taxes, Childcare Credit, $900 Million Childcare Credit, and $325 Million for Public Safety
SAINT PAUL, Minn. – Senate Majority Leader Kari Dziedzic (DFL-Minneapolis) said the Senate has passed the largest tax-cut package in state history that includes $1 billion in tax rebates for Minnesotans, a $1.24 billion cut in Social Security taxes, and more than $2 billion to fund both a child tax credit and relief for families with extreme childcare costs.
Majority Leader Dziedzic said the bill also includes money for local governments to keep property taxes down and $325 million to bolster public safety in every community across the state. It also exempts baby products, including car seats and changing tables, from state sales taxes.
“This year our new Senate DFL majority promised to lower costs, improve stability, and strengthen our communities, and that’s exactly what we are doing with the largest tax cut in Minnesota’s history,” said Leader Dziedzic. “I’m grateful for the hard work of Tax Committee Chair Ann Rest and the members of the Tax Committee, both DFL and Republican, in crafting a bill that will make a tremendous impact in the lives of working families and communities across the state.”
The bill includes:
- $1.1 billion of the surplus goes back to Minnesota taxpayers through one-time refundable tax credits totaling $558 per couple with income up to $150,000. Single filers with income up to $75,000 would receive a $279 rebate. Taxpayers with children would get an additional $56 for each child, up to three children.
- $1.3 billion over four years in tax relief through a new Child Tax Credit equal to $620 per-child for up to three children under age 18 or dependents with disabilities. The credit applies to families making up to $80,000 and will greatly reduce child poverty across the state, the lawmakers said.
- $ 1.24 Billion in tax savings for 322,000 Minnesota seniors, the largest Social Security tax cut in state history. No Minnesota couple earning less than $100,000 will and individuals earning under $78,000 will pay Social Security taxes. Under this provision, 76 percent of Minnesota Social Security recipients will not pay taxes on their benefits.
- Seniors, who receive public pensions instead of Social Security because they worked jobs such as state troopers, firefighters, public safety officers, and some teachers will be able to subtract up to $25,000 of those benefits if they make less than $120,000/year.
- $325 million to address public safety needs in communities across the state. 300 million will go to local governments in one-time funding to bolster their efforts to address urgent public safety needs. The remaining $25 million is set aside over the next five years for grants to local governments to fund criminal investigations and to help law enforcement respond to mental health calls.
- Property tax relief for homeowners, farmers, and small resort owners squeezed by fast-rising property values, and up to $2,000 refunds for homeowners whose property taxes increase more than 10 percent and $100 in one year.
- $907 million to help Minnesotans pay childcare costs. Up to $12,500 refundable tax credit for families earning up to $200,000. Credit is equal to 50% of eligible employment-related childcare expenses.
- Sales tax exemption for Minnesotans who buy baby products like car seats, strollers, cribs and baby wipes.