Paul Marquart, Revenue Commissioner, and the chairs of tax committees at the Minnesota State Capitol said that they will work together to correct an error in a tax law worth $3 billion approved in May.
Due to a drafting mistake, outdated rates of standard deductions were incorporated into law for the tax year 2024. This means married joint filers will see a deduction rate of $24,400 instead of the adjusted $27,650. Single filers would see a deduction of $12,200 instead of $13,825.
Marquart stated that the officials did not notice the error when putting together the tax package. They only noticed recently the inclusion of the 2019 deduction rates, instead of the updated ones.
MinnPost was the first to report this error and warned that it could result in income tax payers losing $352 million per year if not corrected. In a press release, the commissioner, Senate Tax Committee chair Ann Rest, DFL – New Hope, and House Tax Committee chair Aisha Gómez, DFL – Minneapolis, stated that they would issue a correction.
Marquart said to MPR News that “because of the sheer amount, we thought it would be right to let people know about this situation, be transparent and, you’ll see, educate them.”
The law could be fixed by lawmakers when they return to St. Paul in February next year and avoid any impact on taxpayers before 2024 tax filings.
“There are no impacts on taxpayers at this time.” Marquart stated that “we have the assurance that there won’t be any impact on taxpayers going forward.”
Tax law will also include child tax credits and one-time rebates for over 2.5 million Minnesotans. Some corporations and individuals who benefit from investment earnings may be subject to tax increases.