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Minnesota Legislature

Office of the Revisor of Statutes

HF 1034

as introduced - 91st Legislature (2019 - 2020) Posted on 04/26/2019 03:43pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to taxation; individual income and corporate franchise; establishing a
refundable tax credit for certain qualified child care expenses, professionals, and
providers; 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 [290.0693] CHILD CARE WORKFORCE, SUPPLY, AND QUALITY
CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed for payments to a qualifying child care facility. new text end

new text begin (a) In
addition to the credit allowed under section 290.067, an individual taxpayer is allowed a
credit against the tax due under this chapter equal to a percentage of amounts paid to a child
care facility on behalf of a dependent child.
new text end

new text begin (b) The credit under paragraph (a) equals:
new text end

new text begin (1) for a child care facility with a quality rating of four stars as of December 31 of the
taxable year, 150 percent of the amount paid to a child care facility on behalf of a dependent
child, up to $1,050 for one child and up to $2,100 for two or more children;
new text end

new text begin (2) for a child care facility with a quality rating of three stars as of December 31 of the
taxable year, 100 percent of the amount paid to a child care facility on behalf of a dependent
child, up to $850 for one child and up to $1,700 for two or more children;
new text end

new text begin (3) for a child care facility with a quality rating of two stars as of December 31 of the
taxable year, 50 percent of the amount paid to a child care facility on behalf of a dependent
child, up to $650 for one child and up to $1,300 for two or more children; and
new text end

new text begin (4) for a child care facility with a quality rating of one star as of December 31 of the
taxable year, 25 percent of the amount paid to a child care facility on behalf of a dependent
child, up to $500 for one child and up to $1,000 for two or more children.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed for child care professionals. new text end

new text begin (a) An individual taxpayer who
qualifies as a child care professional is allowed a credit against the tax due in this chapter.
An individual claiming the credit under this subdivision may only claim a credit for
employment at one child care facility for the taxable year.
new text end

new text begin (b) The credit under paragraph (a) equals:
new text end

new text begin (1) $500 for a child care professional with a career lattice step level equivalent to a child
development associate as of December 31 of the taxable year;
new text end

new text begin (2) $1,500 for a child care professional with a career lattice step level that represents an
associate's degree as of December 31 of the taxable year; and
new text end

new text begin (3) $3,000 for a child care professional with a career lattice step level that represents a
bachelor's degree as of December 31 of the taxable year.
new text end

new text begin Subd. 3. new text end

new text begin Credit allowed for child care providers. new text end

new text begin (a) A taxpayer who qualifies as a
child care provider is allowed a credit against the tax due under this chapter.
new text end

new text begin (b) The credit under paragraph (a) equals the average monthly number of children who
are not yet enrolled in kindergarten and are homeless, in foster care, or in need of child
protective services in a taxable year and who are attending a child care facility or facilities
operated by the child care provider, multiplied by an amount based upon the quality rating
of each child care facility operated by the child care provider as follows:
new text end

new text begin (1) $2,000 per child for a child care facility with a quality rating of four stars;
new text end

new text begin (2) $1,500 per child for a child care facility with a quality rating of three stars;
new text end

new text begin (3) $1,000 per child for a child care facility with a quality rating of two stars; and
new text end

new text begin (4) $500 per child for a child care facility with a quality rating of one star.
new text end

new text begin (c) The credit under this subdivision is limited to taxpayers who did not claim the credit
under subdivision 2.
new text end

new text begin Subd. 4. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the
meanings given them.
new text end

new text begin (b) "Career lattice step" means the qualification level assigned to a child care professional
on Develop, the Minnesota quality improvement and registry tool.
new text end

new text begin (c) "Child" or "children" means individuals up to and including five years of age.
new text end

new text begin (d) "Child care facility" means any entity with a quality rating of at least one star during
the taxable year for which the credit under this section is claimed.
new text end

new text begin (e) "Child care professional" means an individual who has:
new text end

new text begin (1) obtained a career lattice step level of six or greater; and
new text end

new text begin (2) been employed at the same licensed child care facility for at least six months of the
taxable year in which the credit is claimed.
new text end

new text begin (f) "Child care provider" means an individual or corporate taxpayer who owns or operates
a child care facility or facilities.
new text end

new text begin (g) "Quality rating" means the rating awarded to a child care facility by the Department
of Human Services pursuant to section 124D.142.
new text end

new text begin Subd. 5. new text end

new text begin Allocation for nonresidents and part-year residents. new text end

new text begin For a nonresident or
part-year resident, the credit determined under this section must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin Subd. 6. new text end

new text begin Credit refundable for child care professionals and child care providers;
carryforward provisions.
new text end

new text begin (a) If the amount of total credits that a child care professional
or child care provider is eligible to receive under subdivision 2 or 3 exceeds the claimant's
tax liability under this chapter, the commissioner must refund the excess to the claimant.
new text end

new text begin (b) For all other taxpayers claiming a credit under this section, if the amount of total
credits that the claimant is eligible to receive under this section exceeds the claimant's tax
liability under this chapter, the excess is a credit carryforward for up to five years. The entire
amount of the carryforward is carried over to the earliest tax year to which the carryforward
may be carried, and then to each succeeding year to which the carryforward may be carried.
new text end

new text begin Subd. 7. new text end

new text begin Partnerships; multiple owners. new text end

new text begin (a) Credits allowed to a partnership, limited
liability company taxed as a partnership, corporation, or multiple owners of property are
passed through to the partners, members, shareholders, or owners, respectively, pro rata to
each partner, member, shareholder, or owner based on that person's share of the entity's
income for the taxable year.
new text end

new text begin (b) For a corporation that is a partner in a partnership, the credit allowed for the taxable
year is limited to the lesser of the amount determined for the taxable year or an amount,
separately computed with respect to the corporation's interest in the trade, business, or entity,
equal to the amount of tax attributable to that portion of taxable income that is allocable or
apportionable to the corporation's interest in the trade, business, or entity.
new text end

new text begin Subd. 8. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds authorized under this
section is appropriated annually to the commissioner from the general fund.
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