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S.F. No. 1623 - Increased Phased-In Estate Tax Exclusion Amount (as proposed by the A-1 amendment)
 
Author: Senator Melisa Franzen
 
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
 
Date: March 16, 2015



 

This bill increases the exclusion amount for purposes of calculating the Minnesota taxable estate, effective for estates of decedents dying after December 31, 2014.  The exclusion amount is phased in through 2018 and, effective for decedents dying in 2019 and after, the exclusion amount is the same as the federal exclusion amount ($5 million, adjusted annually for inflation).  Also beginning in 2019, decedents may subtract the unused deceased spousal exclusion amount (also known as the “ported” amount) from the taxable estate.    

Section

Provision

1

Amends the filing requirement to comport with the increased exclusion threshold amounts proposed in section 2.  Beginning in 2019, a Minnesota return is required to be filed only if a federal return is required to be filed. 
 

2

Increases the amount that is excluded from taxation for the Minnesota taxable estate.  Under current law, the first $1.2 million of the taxable estate is excluded.  This amount is increased by $200,000 every year until the amount reaches $2 million.  The bill provides a $2 million exclusion for decedents dying in 2015 and increases the exclusion amount by $1 million through 2018, when the exclusion amount reaches $5 million.  The qualified small business and farm property subtraction would decrease along with the phase-in of the increased general exclusion amount. 

Beginning in 2019, the Minnesota excluded amount is the amount allowed under federal law ($5 million, adjusted annually for inflation), plus the unused deceased spousal exclusion amount.  This would provide for “portability” of the exclusion between spouses.  
 

3

Provides new brackets and rates for the Minnesota taxable estate corresponding to the phase-in of the exclusion amount.  For estates of decedents dying in 2019 and thereafter, a rate of 16 percent would be applied to the Minnesota taxable estate.

 

 
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