1.1 	A bill for an act
1.2 	relating to taxation; property tax refunds; modifying the definition of income for 
1.3 	eligibility;amending Minnesota Statutes 2021 Supplement, section 290A.03, 
1.4 	subdivision 3.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2021 Supplement, section 290A.03, subdivision 3, is 
1.7 	amended to read:
1.8 		Subd. 3.Income. (a) "Income" means ~~the sum of the following:(1)~~ federal adjusted 
1.9 	gross income as defined in the Internal Revenue Code~~; and~~.
1.10 	~~(2) the sum of the following amounts to the extent not included in clause (1):~~
1.11 	~~(i) all nontaxable income;~~
1.12 	~~(ii) the amount of a passive activity loss that is not disallowed as a result of section 469,~~ 
1.13 	~~paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss~~ 
1.14 	~~carryover allowed under section 469(b) of the Internal Revenue Code;~~
1.15 	~~(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a~~ 
1.16 	~~solvent individual excluded from gross income under section 108(g) of the Internal Revenue~~ 
1.17 	~~Code;~~
1.18 	~~(iv) cash public assistance and relief;~~
1.19 	~~(v) any pension or annuity (including railroad retirement benefits, all payments received~~ 
1.20 	~~under the federal Social Security Act, Supplemental Security Income, and veterans benefits),~~ 
1.21 	~~which was not exclusively funded by the claimant or spouse, or which was funded exclusively~~ 
2.1 	~~by the claimant or spouse and which funding payments were excluded from federal adjusted~~ 
2.2 	~~gross income in the years when the payments were made;~~
2.3 	~~(vi) interest received from the federal or a state government or any instrumentality or~~ 
2.4 	~~political subdivision thereof;~~
2.5 	~~(vii) workers' compensation;~~
2.6 	~~(viii) nontaxable strike benefits;~~
2.7 	~~(ix) the gross amounts of payments received in the nature of disability income or sick~~ 
2.8 	~~pay as a result of accident, sickness, or other disability, whether funded through insurance~~ 
2.9 	~~or otherwise;~~
2.10 	~~(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of~~ 
2.11 	~~1986, as amended through December 31, 1995;~~
2.12 	~~(xi) contributions made by the claimant to an individual retirement account, including~~ 
2.13 	~~a qualified voluntary employee contribution; simplified employee pension plan;~~ 
2.14 	~~self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of~~ 
2.15 	~~the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal~~ 
2.16 	~~Revenue Code, to the extent the sum of amounts exceeds the retirement base amount for~~ 
2.17 	~~the claimant and spouse;~~
2.18 	~~(xii) to the extent not included in federal adjusted gross income, distributions received~~ 
2.19 	~~by the claimant or spouse from a traditional or Roth style retirement account or plan;~~
2.20 	~~(xiii) nontaxable scholarship or fellowship grants;~~
2.21 	~~(xiv) alimony received to the extent not included in the recipient's income;~~
2.22 	~~(xv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue~~ 
2.23 	~~Code;~~
2.24 	~~(xvi) the amount deducted for tuition expenses under section 222 of the Internal Revenue~~ 
2.25 	~~Code; and~~
2.26 	~~(xvii) the amount deducted for certain expenses of elementary and secondary school~~ 
2.27 	~~teachers under section 62(a)(2)(D) of the Internal Revenue Code.~~
2.28 	~~In the case of an individual who files an income tax return on a fiscal year basis, the~~ 
2.29 	~~term "federal adjusted gross income" shall mean federal adjusted gross income reflected in~~ 
2.30 	~~the fiscal year ending in the calendar year. Federal adjusted gross income shall not be reduced~~ 
2.31 	~~by the amount of a net operating loss carryback or carryforward or a capital loss carryback~~ 
2.32 	~~or carryforward allowed for the year.~~
3.1 	~~(b) "Income" does not include:~~
3.2 	~~(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;~~
3.3 	~~(2) amounts of any pension or annuity which was exclusively funded by the claimant~~ 
3.4 	~~or spouse and which funding payments were not excluded from federal adjusted gross~~ 
3.5 	~~income in the years when the payments were made;~~
3.6 	~~(3) to the extent included in federal adjusted gross income, amounts contributed by the~~ 
3.7 	~~claimant or spouse to a traditional or Roth style retirement account or plan, but not to exceed~~ 
3.8 	~~the retirement base amount reduced by the amount of contributions excluded from federal~~ 
3.9 	~~adjusted gross income, but not less than zero;~~
3.10 	~~(4) surplus food or other relief in kind supplied by a governmental agency;~~
3.11 	~~(5) relief granted under this chapter;~~
3.12 	~~(6) child support payments received under a temporary or final decree of dissolution or~~ 
3.13 	~~legal separation;~~
3.14 	~~(7) restitution payments received by eligible individuals and excludable interest as~~ 
3.15 	~~defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001,~~ 
3.16 	~~Public Law 107-16;~~
3.17 	~~(8) alimony paid; or~~
3.18 	~~(9) veterans disability compensation paid under title 38 of the United States Code.~~
3.19 	~~(c)~~ (b) The sum of the following amounts may be subtracted from income:
3.20 	(1) for the claimant's first dependent, the exemption amount multiplied by 1.4;
3.21 	(2) for the claimant's second dependent, the exemption amount multiplied by 1.3;
3.22 	(3) for the claimant's third dependent, the exemption amount multiplied by 1.2;
3.23 	(4) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
3.24 	(5) for the claimant's fifth dependent, the exemption amount; and
3.25 	(6) if the claimant or claimant's spouse had a disability or attained the age of 65 on or 
3.26 	before December 31 of the year for which the taxes were levied or rent paid, the exemption 
3.27 	amount.
3.28 	~~(d)~~(c) For purposes of this subdivision, ~~the following terms have the meanings given:~~
3.29 	~~(1)~~ "exemption amount" means the exemption amount under section 290.0121, 
3.30 	subdivision 1, paragraph (b), for the taxable year for which the income is reported~~;~~.
4.1 	~~(2) "retirement base amount" means the deductible amount for the taxable year for the~~ 
4.2 	~~claimant and spouse under section 219(b)(5)(A) of the Internal Revenue Code, adjusted for~~ 
4.3 	~~inflation as provided in section 219(b)(5)(C) of the Internal Revenue Code, without regard~~ 
4.4 	~~to whether the claimant or spouse claimed a deduction; and~~
4.5 	~~(3) "traditional or Roth style retirement account or plan" means retirement plans under~~ 
4.6 	~~sections 401, 403, 408, 408A, and 457 of the Internal Revenue Code.~~

4.7 	EFFECTIVE DATE. This section is effective beginning with refunds based on property 
4.8 	taxes payable in 2023 and rent paid in 2022.