Governor Walz signs bipartisan bill to provide $100 million in tax cuts
ST. PAUL (Valley News Live) - Governor Tim Walz signed bipartisan legislation providing $100 million in tax cuts to Minnesota individuals and businesses. The first bill to pass in the 2023 legislative session, Chapter 1, HF 31 will update several provisions in the state’s tax code to conform to the federal tax code for tax years 2017 through 2022.
“This bipartisan legislation will make tax filing easier and provide tax cuts to students and businesses across Minnesota,” said Governor Walz. “We are working swiftly and collaboratively to deliver on things that will lower costs for families. I’m grateful to our partners in the legislature who wasted no time getting this done for Minnesota.”
“Lawmakers and Governor Walz recognized the need to get Minnesota’s tax code aligned with the federal tax code in order to provide millions of dollars in tax cuts to individuals and business,” said Minnesota Department of Revenue Commissioner Paul Marquart. “By moving quickly to get this bill passed, Governor Walz and lawmakers have given the department time to update affected forms and instructions and ensure a smooth opening to the income tax filing season.”
Areas of tax cuts in the new law include:
- Exempting student loan forgiveness from state taxes: Currently, loan forgiveness is exempt from income for only limited situations. This provision exempts most types of student loan forgiveness from income for most reasons effective for taxable years 2021-2025.
- Tax cuts for businesses impacted by pandemic: The bill provides tax cuts for businesses receiving Shuttered Venue Operator Grants. The program requirements are targeted to live theater and performing arts organizations that suffered reductions in revenue due to COVID-related closures. An exclusion from income is also provided for emergency loan and grant assistance programs that were enacted by the federal government, including forgiveness of Economic Injury Disaster Loans for impacts of COVID-19, Restaurant Revitalization grants, and additional loan assistance programs of the Small Business Association.
The Department of Revenue will update affected 2022 forms and instructions and work with certified tax software providers to update their products. These updates will be made prior to the opening of the 2022 tax filing season.
Taxpayers filing electronically should install the latest updates for their tax software before filing their 2022 tax returns. Taxpayers filing by paper should use the newly updated forms and instructions posted to the Revenue website.
Minnesotans can find out what is included in the new legislation on the Revenue website. If this legislation impacts one’s prior year tax returns, taxpayers will need to amend their return to get the additional tax benefits. Taxpayers can amend their return themselves or consult with a tax professional.
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