Late last week Governor Dayton signed into law a $440 million tax cut package aimed to put “more money in the pockets of Minnesota families and businesses.” Included in the package are changes meant to simplify Minnesota’s estate and gift tax law. The simplification of the estate and gift tax law is budgeted to save Minnesotans $43 million.
Eliminating the Gift Tax
The gift tax certainly has been simplified. In fact, it has been eliminated. The new legislation repealed the gift tax completely, as if it never happened. It is effective retroactively for gifts made after June 30, 2013.
Simplifying the Estate Tax
The estate tax has been simplified by raising the exemption from $1 million to $2 million. The exemption increase is gradual with a phase-in over a five-year period (which begins immediately):
- For decedents dying in 2014 – $1,200,000
- For decedents dying in 2015 – $1,400,000
- For decedents dying in 2016 – $1,600,000
- For decedents dying in 2017 – $1,800,000
- For decedents dying in 2018 and thereafter – $2,000,000
This is the first exemption increase enacted in over a decade.