HF 19

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 03/03/2017 08:33am

A bill for an act
relating to taxation; individual income; providing a refundable credit for student
loan payments; proposing coding for new law in Minnesota Statutes, chapter 290.

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

Section 1.

new text begin [290.0682] STUDENT LOAN CREDIT.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
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new text begin (b) "Adjusted gross income" means federal adjusted gross income as defined in section
62 of the Internal Revenue Code.
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new text begin (c) "Earned income" has the meaning given in section 32(c) of the Internal Revenue
Code.
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new text begin (d) "Eligible individual" means an individual with one or more qualified education loans
related to an undergraduate or graduate degree program at a postsecondary educational
institution.
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new text begin (e) "Eligible loan payments" means the amount the eligible individual paid during the
taxable year in principal and interest on qualified education loans.
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new text begin (f) "Postsecondary educational institution" means a postsecondary institution eligible
for state student aid under section 136A.103 or, if the institution is not located in this state,
a postsecondary institution participating in the federal Pell Grant program under title IV of
the Higher Education Act of 1965, Public Law 89-329, as amended.
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new text begin (g) "Qualified education loan" has the meaning given in section 221 of the Internal
Revenue Code, but is limited to indebtedness incurred on behalf of the eligible individual.
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new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) An eligible individual is allowed a credit against the tax
due under this chapter.
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new text begin (b) The credit for an eligible individual equals the least of:
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new text begin (1) eligible loan payments minus ten percent of an amount equal to adjusted gross income
in excess of $10,000, but in no case less than zero;
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new text begin (2) the earned income for the taxable year of the eligible individual, if any; or
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new text begin (3) the sum of:
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new text begin (i) the interest portion of eligible loan payments made during the taxable year; and
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new text begin (ii) ten percent of the original loan amount of all qualified education loans of the eligible
individual.
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new text begin (c) For a part-year resident, the credit must be allocated based on the percentage calculated
under section 290.06, subdivision 2c, paragraph (e).
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new text begin (d) In the case of a married couple, each spouse is eligible for the credit in this section.
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new text begin Subd. 3. new text end

new text begin Credit refundable. new text end

new text begin If the amount of credit that an individual is eligible to
receive under this section exceeds the individual's tax liability under this chapter, the
commissioner shall refund the excess to the individual.
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new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds required by this section
is appropriated to the commissioner from the general fund.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2016.
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