Fifth tier of the individual income tax establishment at a rate sufficient to offset lost federal Medicaid funds

Minnesota Senate File 2867 establishes a new fifth tax bracket for individual income tax to replace revenue lost due to federal Medicaid funding changes. The bill amends Minnesota Statutes to require the commissioner of revenue to set a specific tax rate for high-income earners (applying to taxable years 2025-2026) that generates revenue equal to the certified loss from federal policy shifts. This new rate applies to income above the existing highest bracket thresholds ($1,667,000 for joint filers, $1,000,000 for single filers). The measure directly affects high-income Minnesotans by increasing their tax burden to offset state Medicaid funding shortfalls.