SF 2103

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 refundability of the child tax
credit and working family credit; amending Minnesota Statutes 2024, sections
289A.08, subdivision 1; 290.0661, subdivision 9; repealing Minnesota Statutes
2024, sections 290.0661, subdivisions 6, 8; 290.0671, subdivision 4.

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

Section 1.

Minnesota Statutes 2024, section 289A.08, subdivision 1, is amended to read:

Subdivision 1.

Generally; individuals.

(a) A taxpayer must file a return for each taxable
year the taxpayer is required to file a return under section 6012 of the Internal Revenue
Code or meets the requirements under paragraph (d) to file a return, except that:

(1) an individual who is not a Minnesota resident for any part of the year is not required
to file a Minnesota income tax return if the individual's gross income derived from Minnesota
sources as determined under sections 290.081, paragraph (a), and 290.17, is less than the
filing requirements for a single individual who is a full year resident of Minnesota;

(2) an individual who is a Minnesota resident is not required to file a Minnesota income
tax return if the individual's gross income derived from Minnesota sources as determined
under section 290.17, less the subtractions allowed under section 290.0132, subdivisions
12 and 15, is less than the filing requirements for a single individual who is a full-year
resident of Minnesota.

(b) The decedent's final income tax return, and other income tax returns for prior years
where the decedent had gross income in excess of the minimum amount at which an
individual is required to file and did not file, must be filed by the decedent's personal
representative, if any. If there is no personal representative, the return or returns must be
filed by the transferees, as defined in section 270C.58, subdivision 3, who receive property
of the decedent.

(c) The term "gross income," as it is used in this section, has the same meaning given it
in section 290.01, subdivision 20.

(d) The commissioner of revenue must annually determine the gross income levels at
which individuals are required to file a return for each taxable year based on the amounts
allowed as a deduction under section 290.0123.

deleted text begin (e) Notwithstanding paragraph (a), an individual must file a Minnesota income tax return
for each taxable year that the taxpayer has made an election to receive advance payments
of the child tax credit under section 290.0661, subdivision 8.
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

Sec. 2.

Minnesota Statutes 2024, section 290.0661, subdivision 9, is amended to read:

Subd. 9.

Minimum credit.

(a) An eligible taxpayer is allowed the greater of the credit
allowed under subdivision 2 or the minimum credit described in this subdivision. A taxpayer
is eligible for the minimum credit under this subdivision if deleted text begin :
deleted text end

deleted text begin (1) the taxpayer received an advance payment of the credit under subdivision 8; and
deleted text end

deleted text begin (2) deleted text end the combined amount of the taxpayer's credits under subdivision 2 and section
290.0671, after the phaseout in subdivision 4, is greater than $0.

(b) The credit allowed under this subdivision is equal to 50 percent of the credit received
under subdivision 2 in the prior taxable year, unless paragraph (c) applies.

(c) If a taxpayer is claiming fewer qualifying children in the current taxable year than
in the prior taxable year, the minimum credit allowed under this subdivision is equal to 50
percent of credit received under this section in the prior taxable year multiplied by a fraction
in which:

(1) the numerator is the number of qualifying children in the current taxable year; and

(2) the denominator is the number of qualifying children in the prior taxable year.

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. 3. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2024, sections 290.0661, subdivisions 6 and 8; and 290.0671,
subdivision 4, new text end new text begin are repealed.
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

APPENDIX

Repealed Minnesota Statutes: 25-04203

290.0661 MINNESOTA CHILD TAX CREDIT.

Subd. 6.

Credit refundable; appropriation.

If the amount of credit which the claimant is eligible to receive under this section exceeds the claimant's tax liability under this chapter, the commissioner shall refund the excess to the claimant. An amount sufficient to pay the refunds required by this section is appropriated to the commissioner from the general fund.

Subd. 8.

Advance payment of credits.

(a) The commissioner of revenue must establish a process to allow taxpayers to elect to receive one or more advance payments of the credit under this section. The amount of advance payments must be based on the taxpayer and commissioner's estimate of the amount of credits for which the taxpayer would be eligible in the taxable year beginning in the calendar year in which the payments were made. The commissioner must not distribute advance payments to a taxpayer who does not elect to receive advance payments.

(b) The amount of a taxpayer's credit under this section for the taxable year is reduced by the amount of advance payments received by the taxpayer in the calendar year during which the taxable year began. If a taxpayer's advance payments exceeded the credit the taxpayer was eligible to receive for the taxable year, the taxpayer's liability for tax is increased by the difference between the amount of advance payments received and the credit amount.

290.0671 MINNESOTA WORKING FAMILY CREDIT.

Subd. 4.

Credit refundable.

If the amount of credit which the claimant is eligible to receive under this section exceeds the claimant's tax liability under this chapter, the commissioner shall refund the excess to the claimant.