State committee reaches deal on proposed tax bill that includes rebate checks

(KSTP) – Minnesota Governor Tim Walz and lawmakers at the state Capitol are continuing to make progress on their priorities this session.

On Wednesday night, committee members reached a deal on a proposed tax bill, which includes rebate checks for Minnesotans – although those checks are less than the initial payments proposed by Gov. Walz, which were up to $1,000 for single tax filers and $2,000 for couples.

According to the legislation, there would be one-time payments of $260 dollars for single tax filers, $520 for married couples and an extra $260 per child, with a maximum of $1,300. These payments apply to individuals who make an annual income of $75,000 or less, or married couples who make less than $150,000 per year.

Earlier this week, Gov. Walz acknowledged that the rebate checks – which are part of a $3 million plan – would be less than what he had originally proposed. Walz’s original proposal called for $1,000 checks for single filers who made less than $75,000 per year, $2,000 for families who made under $150,000 and an extra $200 for each dependent with a max of three.

“It was a proposal we put forward. We compromised in good faith on this. I’m glad Minnesotans are getting money back in their pocket,” said Gov. Walz. “It’ll be a little smaller than we wanted, but I think there’s other things we got for that trade that will help families.”

Members of the Minnesota House responded to Walz’s original proposal with their own – a rebate of $275 for single filers and $550 for joint filers.

In addition, the bill also includes an exemption for social security income and a new child tax credit, as well as more tax breaks.

If a couple earns less than $100,000 per year, there is an exemption from paying state tax on social security income.

For the proposed child tax credit, families who earn less than $35,000 would get $1,750 for each dependent.

“This will significantly cut child poverty, that is the right thing to do. In the state of Minnesota, we should all come together and say no child should live in poverty,” said Rep. Aisha Gomez (DFL-Minneapolis).

“It’s also the largest tax increase – not just the tax part, but also education, transportation. People in Minnesota will get hit with some pretty hefty tax increases, said Rep. Greg Davids (R-Preston).

In February, Republicans announced their tax relief plan, which included one-time rebate checks to be worth $1,250 for single filers and $2,500 for joint filers, and tax credits to be $1,800 per child under the age of 18. They also pushed for a rollback of Social Security taxes, and aimed to eliminate the tax on Social Security, claiming it would provide almost 500,000 Minnesotans with an average tax reduction of $1,277.

During a news conference Thursday morning, republicans in the Minnesota Senate said the final amount of tax increases is still unknown.

“The $2.2 billion of tax increases is just in the tax bill, but by the time you add transportation and everything else that’s there, they were at one point between $9 and $10 billion of additional taxes and fees on the people of Minnesota,” said Sen. Bill Weber (R-Luverne.)

However, there’s still work to be done in order to make this all a reality – the bill must first pass the House and the Senate before making its way to the Gov. Walz’s desk.