House Research Department; April 19, 2015

source: Department of Revenue estimates; House Income Tax Simulation Model estimates

Additional personal and dependent exemptions, tax years 2015 and 2016

H.F. 848, authors A15-0509 DE amendment

Additional state exemption equals 25 percent of total federal personal and dependent exemptions.

For tax year 2015, the federal exemption amount is $4,000; the state additional exemption would be $1,000

$4,000 for a married couple with two dependents

$2,000 for a head of household (single parent) with one dependent

$1,000 for a single filer

Additional state exemption subject to phaseout based on adjusted gross income (AGI) for higher income filers.

Filer type Phaseout starts when income exceeds Exemptions phased-out when income reaches

Married joint $276,050 $398,550

Head of household $230,050 $352,550

Single $184,000 $306,500

Tax benefit equals taxpayers marginal rate (5.35, 7.05, 7.85, or 9.85 percent) times exemption amount. No benefit to taxpayers with no taxable income, or those for whom exemptions are fully phased-out.

Married couple, two dependents

(4 exemptions, $4,000 total)

Single parent, one dependent

(2 exemptions, $2,000 total)

Single filer, no dependents

(1 exemption, $1,000 total)

Income

(AGI)

State tax reduction Income

(AGI)

State tax reduction Income

(AGI)

State tax reduction

$25,000 $0 $25,000 $107.00 $25,000 $53.50

$50,000 $214.00 $50,000 $141.00 $50,000 $70.50

$75,000 $282.00 $75,000 $141.00 $75,000 $70.50

$100,000 $282.00 $100,000 $141.00 $100,000 $78.50

$250,000 $314.00 $250,000 $165.50 $250,000 $45.00

$500,000 $0 $500,000 $0 $500,000 $0

MN Department of Revenue estimates 2,045,000 returns with a tax decrease in 2015; average decrease of $130.

tax year 2015 (fiscal year 2016): $265.7 million income tax reduction

tax year 2016 (fiscal year 2017): $272.9 million income tax reduction

Distribution of tax reduction, tax year 2015 (House Research estimates)

Income (AGI) Number of returns

with decrease

Percent of returns

with decrease

$ of decrease

(millions)

Average

decrease

Less than $50,000 855,000 58.3% $68.5 $80

$50,000 to $99,999 688,000 98.7% $98.9 $144

$100,000 to $249,999 456,000 98.5% $90.3 $198

$250,000 to $499,999 46,000 72.6% $8.0 $176

$500,000 and over 0 0% $0 $0

All returns 2,045,000 75.1% $130