Military retirement pay is defined and calculated under federal law. This bill provides a Minnesota income tax subtraction for military retirement pay, to the extent included in federal taxable income.
Section 1. [Subtractions from federal taxable income] Adds a subtraction for purposes of determining Minnesota income, effective beginning in tax year 2013. The subtraction is phased in as follows, for each taxable year:
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2013 – 20%
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2014 – 40%
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2015 – 60%
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2016 – 80%
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2017 and after – 100%
Section 2. [Definitions] Adds a cross-reference to the subtraction authorized in section 1 for purposes of calculating the alternative minimum tax. Effective beginning in tax year 2013.
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