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HF 1317

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/18/2021 03:54pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to taxation; individual income; establishing an educator expense credit;
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 [290.0661] EDUCATOR EXPENSE CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Eligible educator" has the meaning given in section 62(d) of the Internal Revenue
Code, except an eligible prekindergarten teacher is an eligible educator.
new text end

new text begin (c) "Eligible expenses" means expenses that are deductible under section 62(a)(2)(D)
of the Internal Revenue Code, disregarding the $250 limitation, and substituting the definition
of eligible educator in paragraph (b).
new text end

new text begin (d) "Eligible prekindergarten teacher" means an individual whose primary job
responsibility is working directly with children who are over the age of three and not yet
enrolled in kindergarten, and who is an employee of:
new text end

new text begin (1) a school, as defined in section 120A.22, subdivision 4;
new text end

new text begin (2) a Head Start program under section 119A.50; or
new text end

new text begin (3) a licensed child care center.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) An eligible educator is allowed a credit equal to 25 percent
of the taxpayer's eligible education expenses. The credit is reduced by three percent of
adjusted gross income in excess of the credit phaseout. In no case is the credit less than $0.
new text end

new text begin (b) The credit phaseout equals $40,000, except for a married taxpayer filing a joint return
the phaseout equals $80,000.
new text end

new text begin Subd. 3. new text end

new text begin Credit limit. new text end

new text begin The credit allowed under this section is limited to $250, except,
in the case of a married taxpayer filing a joint return, the limit is $500 if both spouses are
eligible educators.
new text end

new text begin Subd. 4. new text end

new text begin Credit refundable; appropriation. new text end

new text begin (a) If the credit a taxpayer is allowed under
this section exceeds the taxpayer's tax liability under this chapter, the commissioner must
refund the excess to the individual.
new text end

new text begin (b) An amount sufficient to pay the refunds required by this section is appropriated to
the commissioner from the general fund.
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, 2020.
new text end