§ 290.032 — Lump-sum Distribution Tax
Plain-Language Summary
Imposes a special tax on lump-sum distributions from retirement plans for Minnesota residents. The tax is calculated using a five-year averaging method similar to the former federal rules. Nonresidents are not subject to this tax.
290.032 LUMP-SUM DISTRIBUTION TAX.
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Subdivision 1.Imposition.
There is hereby imposed as an addition to the annual income tax for a taxable year of a taxpayer in the classes described in section 290.03 a tax with respect to any distribution received by such taxpayer that is treated as a lump-sum distribution under section 1401(c)(2) of the Small Business Job Protection Act, Public Law 104-188 and that is subject to tax for such taxable year under section 1401(c)(2) of the Small Business Job Protection Act, Public Law 104-188. §
Subd. 2.Computation.
The amount of tax imposed by subdivision 1 shall be computed in the same way as the tax imposed under section 402(d) of the Internal Revenue Code of 1986, as amended through December 31, 1995, except that the initial separate tax shall be an amount equal to five times the tax which would be imposed by section 290.06, subdivision 2c, if the recipient was an unmarried individual, and the taxable net income was an amount equal to one-fifth of the excess of
(i) the total taxable amount of the lump-sum distribution for the year, over
(ii) the minimum distribution allowance, and except that references in section 402(d) of the Internal Revenue Code of 1986, as amended through December 31, 1995, to paragraph (1)(A) thereof shall instead be references to subdivision 1, and the excess, if any, of the subtraction base amount over taxable net income for a qualified individual as provided under section 290.0802, subdivision 2. §
Subd. 3.Nonapplication.
The tax imposed by this section shall not be applicable to a nonresident individual. §
Subd. 4.
[Repealed, 1981 c 343 s 42] §
Subd. 5.
[Repealed, 1983 c 342 art 1 s 44]
History:
1975 c 349 s 28; 1977 c 376 s 2,13; 1979 c 303 art 1 s 3,4; 1980 c 607 art 1 s 32; 1981 c 60 s 27; 1981 c 178 s 11; 1982 c 523 art 1 s 69; art 40 s 14; 1983 c 15 s 3; 1983 c 207 s 43; 1983 c 342 art 1 s 43; 1984 c 514 art 1 s 8; art 4 s 1; 1Sp1985 c 14 art 1 s 13; art 21 s 3,49; 1Sp1986 c 1 art 1 s 9; 1987 c 268 art 1 s 26,27; 1988 c 719 art 1 s 6; art 3 s 12; 1989 c 28 s 25; 1990 c 604 art 2 s 16; 1991 c 291 art 6 s 46; 1992 c 511 art 6 s 19; 1993 c 375 art 8 s 14; 1994 c 587 art 1 s 24; 1995 c 264 art 15 s 1,2; 1Sp2005 c 3 art 4 s 8,9; 1Sp2019 c 6 art 1 s 34
History: History: 1975 c 349 s 28; 1977 c 376 s 2,13; 1979 c 303 art 1 s 3,4; 1980 c 607 art 1 s 32; 1981 c 60 s 27; 1981 c 178 s 11; 1982 c 523 art 1 s 69; art 40 s 14; 1983 c 15 s 3; 1983 c 207 s 43; 1983 c 342 art 1 s 43; 1984 c 514 art 1 s 8; art 4 s 1; 1Sp1985 c 14 art 1 s 13; art 21 s 3,49; 1Sp1986 c 1 art 1 s 9; 1987 c 268 art 1 s 26,27; 1988 c 719 art 1 s 6; art 3 s 12; 1989 c 28 s 25; 1990 c 604 art 2 s 16; 1991 c 291 art 6 s 46; 1992 c 511 art 6 s 19; 1993 c 375 art 8 s 14; 1994 c 587 art 1 s 24; 1995 c 264 art 15 s 1,2; 1Sp2005 c 3 art 4 s 8,9; 1Sp2019 c 6 art 1 s 34