Minnesota Legislature
HF 2006
as introduced - 92nd Legislature (2021 - 2022) Posted on 03/09/2021 12:39pm
Current Version - as introduced
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A bill for an act
relating to taxation; individual income; modifying eligibility for the working family
credit; amending Minnesota Statutes 2020, sections 289A.08, subdivision 11;
290.0671, subdivisions 1, 1a, 7.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2020, section 289A.08, subdivision 11, is amended to read:
Subd. 11.
Information included in income tax return.
(a) The return must state:
(1) the name of the taxpayer, or taxpayers, if the return is a joint return, and the address
of the taxpayer in the same name or names and same address as the taxpayer has used in
making the taxpayer's income tax return to the United States;
(2) the date or dates of birth of the taxpayer or taxpayers;
(3)new text begin the following information:
new text end
new text begin (i)new text end the Social Security number of the taxpayer, or taxpayers, if a Social Security number
has been issued by the United States with respect to the taxpayersnew text begin ; or
new text end
new text begin (ii) the individual tax identification number of the taxpayer, or taxpayers, if a Social
Security number has not been issued by the United States with respect to the taxpayers, as
allowed under section 290.0671new text end ; and
(4) the amount of the taxable income of the taxpayer as it appears on the federal return
for the taxable year to which the Minnesota state return applies.
(b) The taxpayer must attach to the taxpayer's Minnesota state income tax return a copy
of the federal income tax return that the taxpayer has filed or is about to file for the period.
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
Sec. 2.
Minnesota Statutes 2020, section 290.0671, subdivision 1, is amended to read:
Subdivision 1.
Credit allowed.
(a) An individual who is a resident of Minnesota is
allowed a credit against the tax imposed by this chapter equal to a percentage of earned
income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the
Internal Revenue Code, except that:
(1) a taxpayer with no qualifying children who has attained the age of deleted text begin 21, but not attained
age 65deleted text end new text begin 19new text end before the close of the taxable year and is otherwise eligible for a credit under
section 32 of the Internal Revenue Code may also receive a credit; deleted text begin and
deleted text end
(2) a taxpayer who is otherwise eligible for a credit under section 32 of the Internal
Revenue Code remains eligible for the credit even if the taxpayer's earned income or adjusted
gross income exceeds the income limitation under section 32 of the Internal Revenue Codedeleted text begin .deleted text end new text begin ;
and
new text end
new text begin
(3) a taxpayer who is otherwise eligible for a credit under section 32 of the Internal
Revenue Code remains eligible for the credit even if the requirements of section 32(m) of
the Internal Revenue Code are not met if the taxpayer provides an individual taxpayer
identification number.
new text end
(b) For individuals with no qualifying children, the credit equals deleted text begin 3.9deleted text end new text begin 7.0new text end percent of the
first deleted text begin $7,150deleted text end new text begin $7,340new text end of earned income. The credit is reduced by deleted text begin 2.0deleted text end new text begin 3.5new text end percent of earned
income or adjusted gross income, whichever is greater, in excess of the phaseout threshold,
but in no case is the credit less than zero.
(c) For individuals with one qualifying child, the credit equals deleted text begin 9.35deleted text end new text begin 11.0new text end percent of the
first deleted text begin $11,950deleted text end new text begin $12,270new text end of earned income. The credit is reduced by deleted text begin 6.0deleted text end new text begin 7.0new text end percent of earned
income or adjusted gross income, whichever is greater, in excess of the phaseout threshold,
but in no case is the credit less than zero.
(d) For individuals with two qualifying children, the credit equals deleted text begin 11deleted text end new text begin 13new text end percent of the
first deleted text begin $19,600deleted text end new text begin $20,120new text end of earned income. The credit is reduced by deleted text begin 10.5deleted text end new text begin 12.3new text end percent of earned
income or adjusted gross income, whichever is greater, in excess of the phaseout threshold,
but in no case is the credit less than zero.
(e) For individuals with three or more qualifying children, the credit equals deleted text begin 12.5deleted text end new text begin 14.8new text end
percent of the first deleted text begin $20,000deleted text end new text begin $20,530new text end of earned income. The credit is reduced by deleted text begin 10.5deleted text end new text begin 12.3new text end
percent of earned income or adjusted gross income, whichever is greater, in excess of the
phaseout threshold, but in no case is the credit less than zero.
(f) For a part-year resident, the credit must be allocated based on the percentage calculated
under section 290.06, subdivision 2c, paragraph (e).
(g) For a person who was a resident for the entire tax year and has earned income not
subject to tax under this chapter, including income excluded under section 290.0132,
subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross
income reduced by the earned income not subject to tax under this chapter over federal
adjusted gross income. For purposes of this paragraph, the following clauses are not
considered "earned income not subject to tax under this chapter":
(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;
(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and
(3) income derived from an Indian reservation by an enrolled member of the reservation
while living on the reservation.
(h) For the purposes of this section, the phaseout threshold equals:
(1) deleted text begin $14,570deleted text end new text begin $14,960new text end for married taxpayers filing joint returns with no qualifying children;
(2) deleted text begin $8,730deleted text end new text begin $8,960new text end for all other taxpayers with no qualifying children;
(3) deleted text begin $28,610deleted text end new text begin $29,380new text end for married taxpayers filing joint returns with one qualifying child;
(4) deleted text begin $22,770deleted text end new text begin $23,380new text end for all other taxpayers with one qualifying child;
(5) deleted text begin $32,840deleted text end new text begin $33,720new text end for married taxpayers filing joint returns with two qualifying
children;
(6) deleted text begin $27,000deleted text end new text begin $27,720new text end for all other taxpayers with two qualifying children;
(7) deleted text begin $33,140deleted text end new text begin $34,030new text end for married taxpayers filing joint returns with three or more
qualifying children; and
(8) deleted text begin $27,300deleted text end new text begin $28,030new text end for all other taxpayers with three or more qualifying children.
(i) The commissioner shall construct tables showing the amount of the credit at various
income levels and make them available to taxpayers. The tables shall follow the schedule
contained in this subdivision, except that the commissioner may graduate the transition
between income brackets.
Sec. 3.
Minnesota Statutes 2020, section 290.0671, subdivision 1a, is amended to read:
Subd. 1a.
Definitions.
For purposes of this section, the terms "qualifying child," and
"earned income," have the meanings given in section 32(c) of the Internal Revenue Code,
new text begin except that the requirements of section 32(m) of the Internal Revenue Code do not apply
to the definition of a "qualifying child" if all other requirements are met and an individual
taxpayer identification number is provided, new text end and the term "adjusted gross income" has the
meaning given in section 62 of the Internal Revenue Code.
"Earned income of the lesser-earning spouse" has the meaning given in section 290.0675,
subdivision 1, paragraph (d).
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
Sec. 4.
Minnesota Statutes 2020, section 290.0671, subdivision 7, is amended to read:
Subd. 7.
Inflation adjustment.
The commissioner shall annually adjust the earned
income amounts used to calculate the credit and the phase-out thresholds in subdivision 1
as provided in section 270C.22. The statutory year is taxable year deleted text begin 2019deleted text end new text begin 2021new text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2021.
new text end