Session’s first day of floor votes provides tax relief for Minnesota families

The Minnesota Senate provided much-needed tax relief to thousands of Minnesotans with its first day of bill passage in the 2017 Session. The tax conformity bill passed both the House and Senate unanimously.

The Legislature worked together to quickly pass a $21.7 million middle-class tax-relief package in the first 10 days of the 2017 Session. This means less confusion for taxpayers and tax preparers, and more tax savings for teachers, homeowners, small business owners, and thousands of other Minnesotans.

The Minnesota Legislature is faced with considering tax conformity each time Congress updates the federal tax code. There have been past sessions when the Legislature has not been able to afford to conform to many federal tax benefits, creating headaches – and higher bills – for taxpayers. This year’s quick conformity agreement is due in large part to the balanced budget passed in 2013.

Specific tax-relief measures in this bill include:

  • About 70,000 Minnesota teachers will be able to deduct up to $250 of the hard-earned money they take from their pockets and invest in their classrooms and professional development each year.
  • About 35,000 Minnesotans paying tuition will save an average $125 by being able to deduct up to $4,000 in qualified tuition and related expenses.
  • Combat-injured veterans who received combat-related severance payments from which taxes were improperly withheld will be able to file amended tax returns through Dec. 31, 2018.
  • About 80,000 Minnesota homeowners will save an average $60 by being allowed to continue deducting mortgage insurance premiums paid during the year. This also is cited as a home-buying incentive for those looking to enter the housing market.
  • Homeowners who lost their house to foreclosure or short sale will see much-needed financial relief by being allowed to exclude the difference between their outstanding mortgage balance and the home’s sale price from taxable income.

Minnesotans will be able to take advantage of the tax relief when they begin filing their 2016 taxes on Jan. 23. In most cases, Minnesota taxpayers will receive federal conformity-related tax refunds without any action required by the taxpayer. (H.F. 2/S.F. 3)

Senate DFL Media