Minnesota Legislature
HF 1768
as introduced - 88th Legislature (2013 - 2014) Posted on 04/11/2013 11:48am
Bill Text Versions
| Engrossments | ||
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| Introduction | Posted on 04/11/2013 |
Current Version - as introduced
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A bill for an act
relating to taxation; individual income; expanding the working family tax credit;
providing for a child credit; amending Minnesota Statutes 2012, section 290.0671,
subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 290.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2012, section 290.0671, subdivision 1, is amended to read:
Subdivision 1.
Credit allowed.
(a) An individual 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.
(b) For individuals with no qualifying children, the credit equals deleted text begin 1.9125deleted text end new text begin 2.16new text end percent
of the first $4,620 of earned income. The credit is reduced by deleted text begin 1.9125deleted text end new text begin 2.16new text end percent of
earned income or adjusted gross income, whichever is greater, in excess of $5,770, but in
no case is the credit less than zero.
(c) For individuals with one qualifying child, the credit equals deleted text begin 8.5deleted text end new text begin 9.6new text end percent of the
first $6,920 of earned income and deleted text begin 8.5deleted text end new text begin 9.6new text end percent of earned income over $12,080 but less
than $13,450. The credit is reduced by deleted text begin 5.73deleted text end new text begin 6.47new text end percent of earned income or adjusted gross
income, whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
(d) For individuals with two or more qualifying children, the credit equals deleted text begin tendeleted text end new text begin 11.3
new text end percent of the first $9,720 of earned income and deleted text begin 20deleted text end new text begin 22.6new text end percent of earned income over
$14,860 but less than $16,800. The credit is reduced by deleted text begin 10.3deleted text end new text begin 11.6new text end percent of earned
income or adjusted gross income, whichever is greater, in excess of $17,890, but in no
case is the credit less than zero.
(e) 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).
(f) For a person who was a resident for the entire tax year and has earned income
not subject to tax under this chapter, including income excluded under section 290.01,
subdivision 19b, clause (9), 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 subtractions
for military pay under section 290.01, subdivision 19b, clauses (10) and (11), are not
considered "earned income not subject to tax under this chapter."
For the purposes of this paragraph, the exclusion of combat pay under section 112
of the Internal Revenue Code is not considered "earned income not subject to tax under
this chapter."
(g) For tax years beginning after December 31, 2007, and before December 31,
2010, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
$3,000 for married taxpayers filing joint returns. For tax years beginning after December
31, 2008, the commissioner shall annually adjust the $3,000 by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
section 1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009,
the commissioner shall then determine the percent change from the 12 months ending on
August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent
year, from the 12 months ending on August 31, 2007, to the 12 months ending on August
31 of the year preceding the taxable year. The earned income thresholds as adjusted
for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount
is rounded up to the nearest $10. The determination of the commissioner under this
subdivision is not a rule under the Administrative Procedure Act.
(h) For tax years beginning after December 31, 2010, and before January 1, 2012,
the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph
(d), after being adjusted for inflation under subdivision 7, are each increased by $5,000 for
married taxpayers filing joint returns. For tax years beginning after December 31, 2010,
and before January 1, 2012, the commissioner shall annually adjust the $5,000 by the
percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue
Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for the word
"1992." For 2011, the commissioner shall then determine the percent change from the 12
months ending on August 31, 2008, to the 12 months ending on August 31, 2010. The
earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
commissioner under this subdivision is not a rule under the Administrative Procedure Act.
(i) The commissioner shall construct tables showing the amount of the credit at
various income levels and make them available to taxpayers. The tables shall follow
the schedule contained in this subdivision, except that the commissioner may graduate
the transition between income brackets.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after
December 31, 2012.
new text end
Sec. 2.
new text begin
[290.0682] CHILD CREDIT.
new text end
new text begin Subdivision 1. new text end
new text begin Credit allowed. new text end
new text begin
(a) An individual may claim a credit against the
tax due under this chapter in an amount equal to $100 for each qualifying child. For
individuals with adjusted gross income in excess of 300 percent of the federal poverty
guideline, adjusted for family size, the credit is reduced by the ratio of (1) adjusted gross
income in excess of 300 percent of the federal poverty guideline, adjusted for family
size, to (2) the difference between 400 percent of the federal poverty guideline, adjusted
for family size, and 300 percent of the federal poverty guideline, adjusted for family
size; but in no case is the credit less than zero. The credit is not allowed for individuals
with adjusted gross income equal to or greater than 400 percent of the federal poverty
guideline, adjusted for family size.
new text end
new text begin
(b) 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 Subd. 2. 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.
new text end
new text begin
(b) "Adjusted gross income" means federal adjusted gross income as defined in
section 62 of the Internal Revenue Code.
new text end
new text begin
(c) "Family size" is the sum total of the taxpayer, spouse, and each individual eligible
to be claimed as dependent under sections 151 and 152 of the Internal Revenue Code.
new text end
new text begin
(d) "Federal poverty guideline" means the federal poverty guideline for the calendar
year as published in the federal register by the United States Department of Health and
Human Services.
new text end
new text begin
(e) "Qualifying child" has the meaning given in section 24 of the Internal Revenue
Code.
new text end
new text begin Subd. 3. new text end
new text begin Credit refundable. new text end
new text begin
If the amount of credit which the individual is eligible
to receive under this section exceeds the individual's liability for tax under this chapter,
the commissioner shall refund the excess to the claimant.
new text end
new text begin Subd. 4. new text end
new text begin Appropriation. new text end
new text begin
An amount sufficient to pay the refunds required by this
section is appropriated 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, 2012.
new text end