HF 2529

as introduced - 88th Legislature (2013 - 2014) Posted on 02/27/2014 03:25pm

A bill for an act
relating to taxation; individual income; modifying the Minnesota education credit
by adding additional allowances; amending Minnesota Statutes 2012, sections
290.0674, subdivisions 1, 2, 4, by adding subdivisions; 290.0679, subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 290.0674, subdivision 1, is amended to read:

Subdivision 1.

new text begin Education new text end credit allowed.

An individual is allowed a credit against
the tax imposed by this chapter in an amount equal to 75 percent of the amount paid for
education-related expenses new text begin , less the amount of expenses used to claim the credit under
subdivision 1a, new text end for a qualifying child in kindergarten through grade 12. For purposes of
this section, "education-related expenses" means:

(1) fees or tuition for instruction by an instructor under section 120A.22, subdivision
10, clause (1), (2), (3), (4), or (5), or a member of the Minnesota Music Teachers
Association, and who is not a lineal ancestor or sibling of the dependent for instruction
outside the regular school day or school year, including tutoring, driver's education
offered as part of school curriculum, regardless of whether it is taken from a public or
private entity or summer camps, in grade or age appropriate curricula that supplement
curricula and instruction available during the regular school year, that assists a dependent
to improve knowledge of core curriculum areas or to expand knowledge and skills under
the required academic standards under section 120B.021, subdivision 1, and the elective
standard under section 120B.022, subdivision 1, clause (2), and that do not include the
teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
tenets, doctrines, or worship;

(2) expenses for textbooks, including books and other instructional materials and
equipment purchased or leased for use in elementary and secondary schools in teaching
only those subjects legally and commonly taught in public elementary and secondary
schools in this state. "Textbooks" does not include instructional books and materials
used in the teaching of religious tenets, doctrines, or worship, the purpose of which is
to instill such tenets, doctrines, or worship, nor does it include books or materials for
extracurricular activities including sporting events, musical or dramatic events, speech
activities, driver's education, or similar programs;

(3) a maximum expense of $200 per family for personal computer hardware,
excluding single purpose processors, and educational software that assists a dependent to
improve knowledge of core curriculum areas or to expand knowledge and skills under
the required academic standards under section 120B.021, subdivision 1, and the elective
standard under section 120B.022, subdivision 1, clause (2), purchased for use in the
taxpayer's home and not used in a trade or business regardless of whether the computer is
required by the dependent's school; and

(4) the amount paid to others for transportation of a qualifying child attending an
elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
attendance laws, which is not operated for profit, and which adheres to the provisions of
the Civil Rights Act of 1964 and chapter 363A.

For purposes of this section, "qualifying child" has the meaning given in section
32(c)(3) of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end

Sec. 2.

Minnesota Statutes 2012, section 290.0674, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Reading credit allowed. new text end

new text begin (a) An individual is allowed a credit, up to
$2,000, against the tax imposed by this chapter. The credit amount equals 75 percent of
the amount paid for actual expenses, not compensated by insurance or otherwise, for the
treatment, by an instructor, of dyslexia or any reading disorder, disability, or difficulty that
impairs a qualifying child to read and comprehend language at an expected age level.
new text end

new text begin (b) For the purposes of this subdivision, "treatment" means instruction that:
new text end

new text begin (1) teaches language decoding skills in a systematic manner;
new text end

new text begin (2) uses recognized diagnostic assessments to determine what intervention would be
most appropriate for individual students; and
new text end

new text begin (3) utilizes a research-based method.
new text end

new text begin (c) For the purposes of this subdivision, "instructor" means a person qualifying
under section 120A.22, subdivision 10, clauses (1) to (5), who is not a lineal ancestor
or sibling of the qualifying child.
new text end

new text begin (d) This subdivision expires beginning with taxable years beginning after December
31, 2016.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end

Sec. 3.

Minnesota Statutes 2012, section 290.0674, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Reading educator credit allowed. new text end

new text begin An individual is allowed a credit, up
to $1,000, against the tax imposed by this chapter in an amount equal to 75 percent of
the amount paid for training in the diagnosis and treatment of dyslexia. The individual
claiming the credit must be a Minnesota licensed teacher and the training for which the
credit is claimed must be offered through a program that has been field tested and shown to
be effective for dyslexic students that incorporates a complete multisensorial curriculum.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end

Sec. 4.

Minnesota Statutes 2012, section 290.0674, subdivision 2, is amended to read:

Subd. 2.

Limitations.

(a) For claimants with income not greater than $33,500,
the maximum credit allowed new text begin under subdivision 1 new text end for a family is $1,000 multiplied by
the number of qualifying children in kindergarten through grade 12 in the family. The
maximum credit new text begin under subdivision 1 new text end for families with one qualifying child in kindergarten
through grade 12 is reduced by $1 for each $4 of household income over $33,500, and the
maximum credit new text begin under subdivision 1 new text end for families with two or more qualifying children in
kindergarten through grade 12 is reduced by $2 for each $4 of household income over
$33,500, but in no case is the credit new text begin under subdivision 1 new text end less than zero.

For purposes of this section "income" has the meaning given in section 290.067,
subdivision 2a. In the case of a married claimant, a credit is not allowed unless a joint
income tax return is filed.

(b) For a nonresident or part-year resident, the credit determined under subdivision
1 and the maximum credit amount in paragraph (a) new text begin and the credits determined under
subdivisions 1a and 1b new text end must be allocated using the percentage calculated in section
290.06, subdivision 2c, paragraph (e).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end

Sec. 5.

Minnesota Statutes 2012, section 290.0674, subdivision 4, is amended to read:

Subd. 4.

Credit to be refundable.

If the amount of deleted text begin credit deleted text end new text begin total credits new text end that the
claimant is eligible to receive under this section exceeds the claimant's tax liability under
this chapter, the commissioner shall refund the excess to the claimant.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end

Sec. 6.

Minnesota Statutes 2012, section 290.0679, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) "Qualifying taxpayer" means a resident who has
a child in kindergarten through grade 12 in the current tax year and who new text begin (1) new text end met the
income requirements under section 290.0674, subdivision 2, for receiving the education
credit in the tax year preceding the assignment of the taxpayer's refund new text begin , or (2) is allowed
a reading credit under section 290.0674 new text end .

(b) "Education credit" means the credit allowed under section 290.0674 new text begin , subdivision
1 or 1a new text end .

(c) "Refund" means an individual income tax refund.

(d) "Financial institution" means a state or federally chartered bank, savings bank,
savings association, or credit union.

(e) "Qualifying organization" means a tax-exempt organization under section
501(c)(3) of the Internal Revenue Code.

(f) "Assignee" means a financial institution or qualifying organization that is entitled
to receive payment of a refund assigned under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2013.
new text end