House Unanimously Passes Tax Conformity Bill 12 Feb 13

Saint Paul, Minnesota – The Minnesota House of Representatives passed their first bill of the 2013 session today, conforming to federal tax changes, which will reduce taxes for middle class Minnesotans. The bill, which passed unanimously on a bipartisan vote, conforms Minnesota’s tax system to changes passed in the American Taxpayer Relief Act of 2012. As a result, an estimated 200,000 Minnesotans, including teachers, students, homeowners and seniors, would be able to file their state taxes with more convenience and with a greater tax benefit.

“Filing taxes isn’t fun for anyone, but this bill will make that process more convenient for Minnesotans,” said State Representative Ann Lenczewski (DFL – Bloomington), House Tax Committee Chair. “We hope we can move quickly to conform to these bipartisan tax changes that have a real benefit to many Minnesotans.”

Congress’ late enactment of the American Taxpayer Relief Act of 2012 has created potential problems for Minnesota taxpayers. If Minnesota does not conform with the new federal changes, each taxpayer who claims any of the affected deductions will need to file a special form to calculate their Minnesota income tax liability. If Minnesota does conform to the new changes, then Minnesotans would likely not need to change forms and taxpayers could file without making additional adjustments.

“I am pleased the first bill we passed this session will add convenience and needed tax relief to middle class taxpayers,” said Speaker Paul Thissen. “This is common sense legislation that requires our action and we hope to move forward and get this bill signed into law by Governor Dayton.” According to the Minnesota Department of Revenue, over 250,000 Minnesotans would be benefit from federal tax conformity, including: ·

  • 55,000 teachers who claim the $250 educator expense deduction
  • 90,000 homeowners who claim an itemized deduction for mortgage insurance premiums
  • 60,000 students or parents of students who take up to $4,000 for the higher education tuition and fee deduction
  • Unknown amount of seniors who would need to recalculate the amount of social security benefits that would be taxable in Minnesota, which would exceed the amount taxed federally because they would not qualify for the IRA distributions to public charities if age 70 ½ or older.

“On a bipartisan basis we were able to come together and pass legislation that was good for middle class families,” said House Majority Leader Erin Murphy. “We look forward to moving forward this session with priorities to grow our economy with a stronger middle class.”