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.