Minnesota, A More Tax-Friendly Place To Live

Our great State of Minnesota has taken some initiatives to make MN a more tax-friendly place to live. New in 2017.

Individual Initiatives:

  1. Subtraction of up to $4,500 for certain social security benefits.
  2. Child or dependent care credit increased to match the federal levels.
  3. Credit for student loan payments and exclusion of income from discharge of debt on
    student loans.
  4. Credit or subtraction for 529 college plans up to $1,500 or $3,000 for married filing jointly.
  5. Subtraction for earnings of first time homebuyer accounts.

*Details apply to each of the above and phase-outs may apply to certain individuals.

Estate Tax Initiatives:

  1. The individual exemption amount from MN estate taxes has been increased to $3 million by the year 2020. The amount increases each year until capped at $3 million. For decedents passing in 2017, the exemption is retroactively increased from $1.8 million to $2.1 million.

While somethings remain to be changed in the law to make Minnesota more competitive with its rival states, these are positive steps.