Individual income tax subtraction provided for discharges of indebtedness, and certain discharges of indebtedness excluded from income.

HF 385 creates a tax subtraction for Minnesota taxpayers who receive debt forgiveness under specific legal circumstances. It directly affects individuals whose debts were discharged due to "coerced debt" (as defined in section 332.74 of Minnesota law), allowing them to exclude that forgiven amount from their taxable income. This change applies to both state income tax calculations and eligibility for property tax refunds and renter's income tax credits. The policy takes effect for tax years beginning after December 31, 2024.