Minnesota Law Changes Good to KnowSubmitted by Bond & Devick Wealth Partners on August 21st, 2017
For those who live in Minnesota, there are three law changes we thought you should know:
- Transfer-on-Death Designation for Motor Vehicles
The omnibus transportation finance law adds a new provision that allows a transfer-on-death beneficiary designation to be entered on a motor vehicle certificate of title. The designation is subject to the rights of creditors. The designation is not a title application, thus, a beneficiary has no interest in the vehicle until after the death of the owner. The new beneficiary application is available at the Minnesota Department of Public Safety.
- Estate Tax Changes
The Minnesota estate tax exemption was increased from $1.8 million to $ 2.1 million for 2017, and continues to increase in $300,000 increments each year thereafter, stabilizing at $3 million in 2020. Gifts made within three years before death continue to be factored in to the Minnesota estate tax calculation. This change in law is effective retroactively for estates of decedents dying in 2017.
- Minnesota Taxation of Social Security Benefits
For many years (through tax year 2016), Minnesota state income taxation of Social Security benefits followed the federal income tax rules. However, the 2017 Legislature enacted a law expanding the amount of Social Security benefits exempt from state income tax.
Beginning in tax year 2017, Minnesota allows subtraction of a flat amount of benefits subject to tax at the federal level - $4,500 for married couples filing joint returns, $3,500 for single and head of household filers, and $2,250 for married separate filers.
The state subtraction is reduced by 20 percent of provisional income over a threshold. The income phase-out limits for married couples begins at $77,000 and $60,200 for single tax filers.It is projected the average Social Security recipient will receive annual savings of $201 from this change.