Gov. Walz Signs Bill Fixing $352 Million Tax Error From 2023 Law

ST. PAUL, MN — Gov. Tim Walz on Monday signed a bill fixing an error in a 2023 tax bill that would have cost Minnesotans a collective $352 million.

House File 2757 corrects previous legislation that inadvertently used the 2019 standard deduction amounts instead of the correct 2023 amounts.

The bill Walz signed Monday ensures that taxpayers will receive standard deductions this filing season that correctly account for the significant inflation that has occurred since 2019.

Under the new bill, the standard deduction amount for 2023 will be adjusted to $27,650 for married joint or surviving spouse filers, $20,800 for head of household filers, and $13,825 for all other filers.

Taxpayers who already filed their returns do not need to take action. The state has offered the correct 2023 Minnesota standard deduction amounts since the start of tax season.

"No taxpayers are impacted by this drafting error for the current 2023 tax year," read a statement from the Department of Revenue in July 2023, when the error was discovered.

"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."

In 2019, legislators doubled the standard deduction for state taxpayers. They set the amount for a married joint filer at $24,400 and a single filer at $12,200. Lawmakers also directed the Department of Revenue commissioner to adjust those amounts annually for inflation.

However, tax legislation signed into law in May 2023 mistakenly used the 2019 standard deduction amounts for the starting point in the tax year 2024 instead of the inflation-adjusted amounts of $27,650/$13,825, "eliminating four years of inflation adjustments."

Reporting from the Associated Press was used in this story.