SF 1554

Introduction - 94th Legislature (2025 - 2026)

Posted on 02/18/2025 10:22 a.m.

A bill for an act
relating to taxation; individual income; providing a credit for attendance at a
nonpublic school; 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 [290.0687] NONPUBLIC SCHOOL TAX 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) "Full-time academic instruction" means attendance in a nonpublic school for at least
one semester or the equivalent during the taxable year.
new text end

new text begin (c) "Noncustodial parent" means in the case of divorce or separation a parent with whom
a child resides for less than 50 percent of the taxable year.
new text end

new text begin (d) "Nonpublic school" means any legal education setting in Minnesota that meets the
compulsory attendance requirements in section 120A.22, excluding public and charter
schools.
new text end

new text begin (e) "Qualifying student" means an individual who is the taxpayer's "qualifying child"
under section 152(c)(1) to (4) of the Internal Revenue Code, and who receives full-time
academic instruction in a nonpublic school.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed; amount; limitations. new text end

new text begin (a) An individual taxpayer is allowed
a credit against the tax imposed under this chapter for each of the taxpayer's qualifying
students. The credit is equal to the number of the taxpayer's qualifying students multiplied
by the amount of the formula allowance under section 126C.10, subdivision 2, effective for
the school fiscal year that begins July 1 of the taxable year.
new text end

new text begin (b) The credit is limited to the taxpayer's liability for tax under this chapter for the taxable
year. For a nonresident or part-year resident, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin (c) No more than one taxpayer may claim the credit created by this section for a qualifying
student in a taxable year. A noncustodial parent may claim the credit created by this section
if:
new text end

new text begin (1) a court has awarded the noncustodial parent the tax benefits associated with the
qualifying student pursuant to a dissolution of marriage under chapter 518; or
new text end

new text begin (2) the custodial parent signs a written declaration that the custodial parent will not claim
the tax credit for the qualifying student.
new text end

new text begin (d) A noncustodial parent must attach a copy of the court order or written declaration
to the tax return for the applicable taxable year.
new text end

new text begin Subd. 3. new text end

new text begin Administration; restrictions. new text end

new text begin (a) The credit must not be used by the
commissioner to pay or offset the taxpayer's:
new text end

new text begin (1) delinquent tax liability;
new text end

new text begin (2) accrued penalty or interest from the taxpayer's failure to file a report or return;
new text end

new text begin (3) accrued penalty or interest from the taxpayer's failure to pay a state tax within the
statutory period allowed for payment; or
new text end

new text begin (4) tax liability from any prior tax year.
new text end

new text begin (b) A refund based on the credit is not subject to revenue recapture under chapter 270A.
new text end

new text begin (c) The commissioner may adopt rules under chapter 14 to carry out the provisions of
this section. However, the commissioner must not require evidence of a taxpayer's compliance
with the compulsory attendance requirements in section 120A.22 beyond what is required
under that section.
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, 2024.
new text end