Committee lays over measure to exempt certain damage awards from withholding

A representative introduced House File 36 11 on March 4, 2026, asking the Minnesota House Taxes Committee to allow a state income tax withholding deduction for damages awarded to individuals in lawsuits against federal agents, including claims for emotional and financial harms.

The presenter said the state already offers withholding relief for some claims — such as sexual assault and physical‑injury awards — and argued the change would ensure people who receive damages for nonphysical harms are not further burdened by tax withholding. No one had signed up to testify on the bill and committee members did not ask substantive questions during the brief presentation.

Chair Gomez moved to lay House File 36 11 over for possible inclusion in the 2026 tax bill; the motion was renewed and the bill was laid over for further consideration.

The committee took no final action on the merits of the proposal and asked staff to retain the bill in committee for further review.