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Minnesota Legislature

Office of the Revisor of Statutes

HF 578

as introduced - 91st Legislature (2019 - 2020) Posted on 02/11/2019 03:47pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to taxation; individual income; modifying the K-12 education expense
credit; amending Minnesota Statutes 2018, sections 290.0674, subdivision 2;
290.0679, subdivisions 1, 3; repealing Minnesota Statutes 2018, section 290.0674,
subdivision 2a.

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

Section 1.

Minnesota Statutes 2018, section 290.0674, subdivision 2, is amended to read:


Subd. 2.

Limitations.

(a) For claimants with income not greater than deleted text begin$33,500deleted text endnew text begin the income
eligibility guideline
new text end, the maximum credit allowed for a family is $1,000 multiplied by the
number of qualifying children in kindergarten through grade 12 in the family. The maximum
credit for families with one qualifying child in kindergarten through grade 12 is reduced by
$1 for each $4 of deleted text beginhouseholddeleted text end income over deleted text begin$33,500deleted text endnew text begin the income eligibility guidelinenew text end, and the
maximum credit for families with two or more qualifying children in kindergarten through
grade 12 is reduced by $2 for each $4 of deleted text beginhouseholddeleted text end income over deleted text begin$33,500deleted text endnew text begin the income
eligibility guideline
new text end, but in no case is the credit less than zero.new text begin For purposes of this
subdivision, "income" and "income eligibility guideline" mean the amounts determined
under United States Code, title 42, section 1758(b)(1), for reduced-price lunch as of July 1
of the taxable year.
new text end

(b) In the case of a married claimant, a credit is not allowed unless a joint income tax
return is filed.

(c) For a nonresident or part-year resident, the credit determined under subdivision 1
and the maximum credit amount in paragraph (a) must be allocated using the percentage
calculated in section 290.06, subdivision 2c, paragraph (e).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2018.
new text end

Sec. 2.

Minnesota Statutes 2018, section 290.0679, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) "Qualifying taxpayer" means a resident who has a child
in kindergarten through grade 12 in the current tax year deleted text beginand who met the income requirements
under section 290.0674, subdivision 2, for receiving the education credit in the tax year
preceding the assignment of the taxpayer's refund
deleted text end.

(b) "Education credit" means the credit allowed under section 290.0674.

(c) "Refund" means an individual income tax refund.

(d) "Financial institution" means a state or federally chartered bank, savings bank, savings
association, or credit union.

(e) "Qualifying organization" means a tax-exempt organization under section 501(c)(3)
of the Internal Revenue Code.

(f) "Assignee" means a financial institution or qualifying organization that is entitled to
receive payment of a refund assigned under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2018.
new text end

Sec. 3.

Minnesota Statutes 2018, section 290.0679, subdivision 3, is amended to read:


Subd. 3.

Consent for disclosure.

When the taxpayer applies to the financial institution
or the qualifying organization for a loan to be secured by the assignment under subdivision
2new text begin and the refund is from a joint returnnew text end, the taxpayer new text beginand taxpayer's spouse new text endmust sign a written
consent deleted text beginon a form prescribed by the commissioner. The consent must authorizedeleted text end new text beginauthorizing
new text end the commissioner to disclose to the financial institution or qualifying organization the total
amount of state taxes owed or revenue recapture claims filed under chapter 270A against
the taxpayernew text begin and taxpayer's spousenew text end, and the total amount of outstanding assignments made
by the taxpayer new text beginand taxpayer's spouse new text endunder this section. deleted text beginFor a refund from a joint return,
the consent must also authorize the disclosure of taxes, revenue recapture claims, and
assignments relating to the taxpayer's spouse, and must be signed by the spouse.
deleted text end new text beginThe consent
must be made on a form prescribed by the commissioner and must be signed by the taxpayer
and taxpayer's spouse.
new text endThe financial institution or qualifying organization may request that
the taxpayer provide a copy of the taxpayer's previous year's income tax return, if any, and
may assist the taxpayer in requesting a copy of the previous year's return from the
commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2018.
new text end

Sec. 4. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2018, section 290.0674, subdivision 2a, new text end new text begin is 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, 2018.
new text end

APPENDIX

Repealed Minnesota Statutes: 19-1633

290.0674 MINNESOTA EDUCATION CREDIT.

Subd. 2a.

Income.

(a) For purposes of this section, "income" means the sum of the following:

(1) federal adjusted gross income as defined in section 62 of the Internal Revenue Code; and

(2) the sum of the following amounts to the extent not included in clause (1):

(i) all nontaxable income;

(ii) the amount of a passive activity loss that is not disallowed as a result of section 469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss carryover allowed under section 469(b) of the Internal Revenue Code;

(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a solvent individual excluded from gross income under section 108(g) of the Internal Revenue Code;

(iv) cash public assistance and relief;

(v) any pension or annuity (including railroad retirement benefits, all payments received under the federal Social Security Act, Supplemental Security Income, and veterans benefits), which was not exclusively funded by the claimant or spouse, or which was funded exclusively by the claimant or spouse and which funding payments were excluded from federal adjusted gross income in the years when the payments were made;

(vi) interest received from the federal or a state government or any instrumentality or political subdivision thereof;

(vii) workers' compensation;

(viii) nontaxable strike benefits;

(ix) the gross amounts of payments received in the nature of disability income or sick pay as a result of accident, sickness, or other disability, whether funded through insurance or otherwise;

(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1995;

(xi) contributions made by the claimant to an individual retirement account, including a qualified voluntary employee contribution; simplified employee pension plan; self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal Revenue Code;

(xii) nontaxable scholarship or fellowship grants;

(xiii) the amount of deduction allowed under section 199 of the Internal Revenue Code;

(xiv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue Code;

(xv) the amount deducted for tuition expenses under section 222 of the Internal Revenue Code; and

(xvi) the amount deducted for certain expenses of elementary and secondary school teachers under section 62(a)(2)(D) of the Internal Revenue Code.

In the case of an individual who files an income tax return on a fiscal year basis, the term "federal adjusted gross income" means federal adjusted gross income reflected in the fiscal year ending in the next calendar year. Federal adjusted gross income may not be reduced by the amount of a net operating loss carryback or carryforward or a capital loss carryback or carryforward allowed for the year.

(b) "Income" does not include:

(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;

(2) amounts of any pension or annuity that were exclusively funded by the claimant or spouse if the funding payments were not excluded from federal adjusted gross income in the years when the payments were made;

(3) surplus food or other relief in kind supplied by a governmental agency;

(4) relief granted under chapter 290A;

(5) child support payments received under a temporary or final decree of dissolution or legal separation; and

(6) restitution payments received by eligible individuals and excludable interest as defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107-16.