$3 billion tax deal includes child tax rebate, property tax relief
Despite having the largest surplus in state history, the Minnesota legislature is handing out much smaller rebates than originally promised.
Governor Walz originally proposed $1,000 tax rebates for single filers, and $2,000 for couples filing jointly. The final package approved by both the House and Senate calls for just $260 tax rebates, but provides additional relief elsewhere.
Next tax season, Minnesotans can expect to see a handful of cuts to their taxes, including a child tax credit of up to $1,750 per child, which begins phasing out for married couples with an annual income of $35,000, and $29,000 for single filers.
Most Minnesotans who receive social security would see an end to the taxes on it. Couples making under $100,000 per year would be exempt from the state tax on social security, and couples making more than $100,000 would begin to see incremental increases in taxes up to $140,000, at which point the normal tax rate would apply.
Renters and homeowners would see a one-time property tax refund of about 20%.
There are also tax increases, which Senate Republicans have criticized.
The Minnesota legislature is moving ahead with increasing the sales tax by 1% in the Twin Cities metro area to pay for road maintenance and housing improvements. It’s also looking at increasing the gas tax and adding a $0.75 flat fee for all deliveries.
With the legalization of cannabis, the legislature is also planning on taxing those sales at 10%.
Thirty-six municipalities will be able to put a proposed sales tax increase on their voting ballots. However, a moratorium requires they wait two years before implementing them.