ST PAUL, Minn. — A multi-million dollar mistake made it into Minnesota's recently-passed tax law, but lawmakers say they should be able to fix it next year.
The Minnesota Department of Revenue said a drafting error in the new law wiped out four years of inflation adjustments to standard deductions, which could lead to higher levels of taxable income, potentially leading to millions of dollars in additional taxes collected by the state.
"If an update is made during the 2024 legislative session, no taxpayers would see an impact to their tax filing due to this drafting error," the Department of Revenue said in a statement.
House and Senate tax committee leaders and Minnesota Department of Revenue Commissioner Paul Marquart say they've reached an agreement to update the drafting error and correct the standard deductions in the next session.
In 2019, the legislature set standard deductions at $12,200 for single filers and $24,400 for married couples filing jointly, with amounts adjusted annually for inflation thereafter. The 2023 inflation-adjusted standard deductions are $13,825 for a single filer and $27,650 for married couples, but the new tax law incorrectly reverted to 2019 amounts to calculate deductions starting next year.
The error will not affect any Minnesota taxpayers for the 2023 tax year, as the change wasn't due to begin until the 2024 tax year.
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