HF 1479

1st Committee Engrossment - 86th Legislature (2009 - 2010)

Posted on 03/19/2013 07:28 p.m.

1.1A bill for an act 1.2relating to taxation; individual income; providing a refundable credit for payment 1.3of principal and interest on student loans; appropriating money;proposing coding 1.4for new law in Minnesota Statutes, chapter 290. 1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.6    Section 1. new text begin [290.0678] EDUCATION OPPORTUNITY CREDIT. new text end 1.7     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 new text end 1.8 new text begin have the meanings given. new text end 1.9 new text begin (b) "Eligible individual" means an individual who: new text end 1.10 new text begin (1) is a Minnesota resident who graduated from a postsecondary educational new text end 1.11 new text begin institution located in Minnesota or from a public postsecondary educational institution new text end 1.12 new text begin located in a state with which a tuition reciprocity agreement under section 136A.08 was in new text end 1.13 new text begin effect when the individual graduated; and new text end 1.14 new text begin (2) has a household income under $75,000. For purposes of this section, "household new text end 1.15 new text begin income" means income as described in section 290.067, subdivision 2a. new text end 1.16 new text begin (c) "Eligible employer" means an employer of an eligible individual who undertakes new text end 1.17 new text begin partial or full payment of the eligible individual's qualified education loan. new text end 1.18 new text begin (d) "Qualified education loan" has the meaning given in section 221 of the Internal new text end 1.19 new text begin Revenue Code, but is limited to indebtedness incurred on behalf of the taxpayer or new text end 1.20 new text begin taxpayer's spouse. new text end 1.21 new text begin (e) "Postsecondary educational institution" means a two- or four-year postsecondary new text end 1.22 new text begin educational institution that meets the definition of "eligible educational institution" new text end 1.23 new text begin provided in section 221(d)(2)(B) of the Internal Revenue Code. new text end 2.1 new text begin (f) "Maximum qualifying amount" is the allowance for tuition and fees most recently new text end 2.2 new text begin set in law as required under section 136A.121, subdivision 6. For an eligible individual new text end 2.3 new text begin who graduated from a two-year postsecondary educational institution, the maximum new text end 2.4 new text begin qualifying amount equals the allowance for tuition and fees specified for a two-year new text end 2.5 new text begin institution, and for an eligible individual who graduated from a four-year postsecondary new text end 2.6 new text begin educational institution, the maximum qualifying amount equals the allowance for tuition new text end 2.7 new text begin and fees specified for a four-year institution. new text end 2.8     new text begin Subd. 2. new text end new text begin Credit allowed. new text end new text begin (a) An eligible individual or an eligible employer is new text end 2.9 new text begin allowed a credit against the tax due under this chapter. new text end 2.10 new text begin (b) The credit amount for an eligible individual equals the lesser of: new text end 2.11 new text begin (1) the amount the individual paid during the taxable year to pay principal and new text end 2.12 new text begin interest on qualified education loans; or new text end 2.13 new text begin (2) the maximum qualifying amount. new text end 2.14 new text begin (c) An eligible employer may only claim the credit based on qualified education new text end 2.15 new text begin loan payments made on behalf of the eligible individual in months in which the eligible new text end 2.16 new text begin individual did not make payments. The credit amount for an eligible employer equals new text end 2.17 new text begin the least of: new text end 2.18 new text begin (1) the amount the eligible employer paid during the taxable year to pay principal new text end 2.19 new text begin and interest on qualified education loans of an eligible individual; new text end 2.20 new text begin (2) the maximum qualifying amount; or new text end 2.21 new text begin (3) the amount the eligible individual would have been able to claim had the eligible new text end 2.22 new text begin individual made the payments in place of the employer. new text end 2.23     new text begin Subd. 3. new text end new text begin Credit refundable. new text end new text begin If the amount of credit which a taxpayer is eligible new text end 2.24 new text begin to receive under this section exceeds the taxpayer's tax liability under this chapter, the new text end 2.25 new text begin commissioner shall refund the excess to the taxpayer. new text end 2.26     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 new text end 2.27 new text begin section is appropriated to the commissioner from the general fund. new text end 2.28 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after new text end 2.29 new text begin December 31, 2008. new text end