SF 2102

Introduction - 94th Legislature (2025 - 2026)

Posted on 03/04/2025 09:47 a.m.

A bill for an act
relating to taxation; individual income; removing availability to claim the working
family credit with an ITIN; amending Minnesota Statutes 2024, section 290.0671,
subdivisions 1, 1a.

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

Section 1.

Minnesota Statutes 2024, 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 19, but not attained
age 65 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; new text begin and
new 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 Code deleted text begin ;
and deleted text end new text begin .
new text end

deleted text begin (3) section 32(m) of the Internal Revenue Code does not apply.
deleted text end

(b) A taxpayer's working family credit equals four percent of the first $8,750 of earned
income.

(c) The credit under this section is increased by:

(1) $925 for a taxpayer with one qualifying older child;

(2) $2,100 for a taxpayer with two qualifying older children; or

(3) $2,500 for a taxpayer with three or more qualifying older children.

(d) The credit under this section is phased out jointly with the credit under section
290.0661, subdivision 4. For a taxpayer with one or more qualifying older children who
did not qualify for the credit under section 290.0661, the phaseout rate equals nine percent.

(e) For a person who was a resident for the entire tax year and has earned income not
subject to tax under this chapter, 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.

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

Sec. 2.

Minnesota Statutes 2024, section 290.0671, subdivision 1a, is amended to read:

Subd. 1a.

Definitions.

For purposes of this section, "qualifying older child" means a
qualifying child, as defined in section 32(c) of the Internal Revenue Code, that attained at
least the age of 18 in the taxable year. deleted text begin For the purposes of determining a qualifying older
child, section 32(m) of the Internal Revenue Code does not apply.
deleted 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