Veterans Enjoy New Tax Break on Their Pensions This Year

Veterans could receive up to $23 million in total tax breaks this year.

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ST. PAUL, Minn. – After years of struggling to do anything substantial regarding veterans’ pensions, state lawmakers are now worried the new tax-exempt status will go unnoticed.

The Pioneer Press reports that prior to the passage of the law last year Minnesota was one of only five states that taxed veterans’ pensions. Rep. Bob Dettmer (R – Forest Lake) estimated that the state’s 19,000 veterans would save about $23 million in total this year, if they know of the tax break. Dettmer has worked to make pensions tax exempt for several years.

KARE 11 reports that employers have long complained to Dettmer of their inability to hire veterans in Minnesota. They identified the unfavorable tax climate as a key reason for that difficulty. In addition, several publications for veterans listed Minnesota unfavorably on lists of the best places for members of the military to retire to.

“People like Minnesota. They want to come back to Minnesota. They want to raise their families here,” Dettmer told KARE 11.  “These are things that are important to our veterans population, our men and women that serve.”

The exemption can be found in 2016 Schedule M1M, the Income Additions and Subtractions form, and the Minnesota Department of Revenue has created a page to lead veterans through the process of declaring their pensions properly for tax exemptions. The deadline for filing taxes is Tuesday, April 18.

“The tax benefit is one of the key decision factors as our people get ready to retire from the active army,” General Larry Shellito, the Minnesota Veterans Affairs Commissioner, told KARE 11. “Ironically there’s still a number of people out there that have not heard this news, or have not taken advantage of this benefit.”

 

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