HF 4776

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/11/2024 02:15pm

A bill for an act
relating to taxation; individual income and corporate franchise; allowing a
subtraction for employer-provided dependent care assistance; establishing a tax
credit for employer-provided child care expenses; amending Minnesota Statutes
2022, section 290.0132, by adding a subdivision; proposing coding for new law
in Minnesota Statutes, chapter 290.

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

Section 1.

Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
to read:

new text begin Subd. 36. new text end

new text begin Employer-provided dependent care assistance. new text end

new text begin (a) The amount of dependent
care assistance is a subtraction. The subtraction under this subdivision is limited to $10,000
for a married taxpayer filing a joint return and $5,000 for all other filers.
new text end

new text begin (b) For the purposes of this section, "dependent care assistance" has the meaning given
in section 129(e)(1) of the Internal Revenue Code, but is limited to amounts paid by an
employer to an employee in excess of the amount that is excluded from gross income under
section 129(a) of the Internal Revenue Code.
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, 2023.
new text end

Sec. 2.

new text begin [290.0687] EMPLOYER-PROVIDED CHILD CARE CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin (a) For the purposes of this section, the following term has
the meaning given.
new text end

new text begin (b) "Employer" has the meaning given in section 290.92, clause (4).
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) An employer is allowed a credit against the taxes imposed
under this chapter equal to the amount of the credit claimed under section 45F of the Internal
Revenue Code, except the credit under this section is limited to credits claimed based on
qualified child care expenses or qualified child care resource and referral expenditures that
were paid or incurred in Minnesota.
new text end

new text begin (b) For a taxpayer who claimed a credit under section 45F of the Internal Revenue Code
based partly on expenses paid or incurred outside of Minnesota, the credit under this section
equals the amount of the credit claimed federally that is attributable to expenses paid or
incurred in Minnesota.
new text end

new text begin Subd. 3. new text end

new text begin Partnerships. new text end

new text begin Credits granted to a partnership, a limited liability company
taxed as a partnership, or S corporation are passed through to the partners, members, or
shareholders, respectively, pro rata to each partner, member, or shareholder based on their
share of the entity's assets or as specially allocated in their organizational documents or any
other executed agreement, as of the last day of the taxable year.
new text end

new text begin Subd. 4. new text end

new text begin Carryover. new text end

new text begin The credit under this section may not exceed the taxpayer's liability
for tax under this chapter. If the amount of the credit under this section exceeds the taxpayer's
liability for tax under this chapter, the excess is a credit carryover to each of the five
succeeding taxable years. The entire amount of the excess unused credit for the taxable year
must be carried first to the earliest of the taxable years to which the credit may be carried
and then to each successive year to which the credit may be carried. The amount of the
unused credit that may be added under this subdivision may not exceed the taxpayer's
liability for tax, less any credit for the current taxable year.
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, 2023.
new text end