Standard deduction glitch remedied; two other changes made

An error in the 2023 state tax law that shrunk the amount of the individual income tax standard deduction to 2019 levels — omitting four years of inflation adjustments — has been corrected.

Sponsored by Rep. Aisha Gomez (DFL-Mpls) and Sen. Ann Rest (DFL-New Hope), a new law makes three changes to provisions enacted in 2023.

It amends the state standard deduction law to rebase the tax year 2023 standard deduction amounts. The 2023 tax act inadvertently reduced the standard deduction for tax year 2024 by undoing inflation adjustments since tax year 2019. The change is effective retroactively for tax years 2023 and later, and the amounts will be adjusted for inflation beginning in tax year 2024.

The law also aligns the definition of “Tribal Nation” in the statewide local housing aid statute with the definition used in the Tribal Nation aid program. The change will allow any of the 11 federally recognized tribes in Minnesota to apply for statewide local housing aid, effective for aids payable in 2024.

And it amends the local sales tax authorization for Beltrami County to allow a 0.625% tax approved by voters at an election held on Nov. 7, 2023, effective retroactively from that date.

HF2757*/SF2405/CH76

HF2757* / SF2405 / CH76