HF 2237

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; income taxes; expanding the 
  1.3             dependent care credit; amending Minnesota Statutes 
  1.4             2000, section 290.067, subdivision 1. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  Minnesota Statutes 2000, section 290.067, 
  1.7   subdivision 1, is amended to read: 
  1.8      Subdivision 1.  [AMOUNT OF CREDIT.] (a) A taxpayer may take 
  1.9   as a credit against the tax due from the taxpayer and a spouse, 
  1.10  if any, under this chapter an amount equal to the dependent care 
  1.11  credit for which the taxpayer is eligible pursuant to the 
  1.12  provisions of section 21 of the Internal Revenue Code subject to 
  1.13  the limitations provided in subdivision 2 except that in 
  1.14  determining whether the child qualified as a dependent, income 
  1.15  received as a Minnesota family investment program grant or 
  1.16  allowance to or on behalf of the child must not be taken into 
  1.17  account in determining whether the child received more than half 
  1.18  of the child's support from the taxpayer, and the provisions of 
  1.19  section 32(b)(1)(D) of the Internal Revenue Code do not apply. 
  1.20     (b) If a child who has not attained the age of six years at 
  1.21  the close of the taxable year is cared for at a licensed family 
  1.22  day care home operated by the child's parent, the taxpayer is 
  1.23  deemed to have paid employment-related expenses.  If the child 
  1.24  is 16 months old or younger at the close of the taxable year, 
  1.25  the amount of expenses deemed to have been paid equals the 
  2.1   maximum limit for one qualified individual under section 21(c) 
  2.2   and (d) of the Internal Revenue Code.  If the child is older 
  2.3   than 16 months of age but has not attained the age of six years 
  2.4   at the close of the taxable year, the amount of expenses deemed 
  2.5   to have been paid equals the amount the licensee would charge 
  2.6   for the care of a child of the same age for the same number of 
  2.7   hours of care.  
  2.8      (c) If a married couple: 
  2.9      (1) has a child who has not attained the age of one year at 
  2.10  the close of the taxable year; 
  2.11     (2) files a joint tax return for the taxable year; and 
  2.12     (3) does not participate in a dependent care assistance 
  2.13  program as defined in section 129 of the Internal Revenue Code, 
  2.14  in lieu of the actual employment related expenses paid for that 
  2.15  child under paragraph (a) or the deemed amount under paragraph 
  2.16  (b), the lesser of (i) the combined earned income of the couple 
  2.17  or (ii) $2,400 will be deemed to be the employment related 
  2.18  expense paid for that child.  The earned income limitation of 
  2.19  section 21(d) of the Internal Revenue Code shall not apply to 
  2.20  this deemed amount.  These deemed amounts apply regardless of 
  2.21  whether any employment-related expenses have been paid.  
  2.22     (d) An individual who: 
  2.23     (1) incurs employment-related expenses for the care of one 
  2.24  or more dependents who have attained the age of 13 years but not 
  2.25  attained the age of 15 years at the close of the taxable year; 
  2.26  and 
  2.27     (2) is not eligible for a credit under section 21 of the 
  2.28  Internal Revenue Code for the employment-related expenses 
  2.29  incurred after the dependent or dependents attained the age of 
  2.30  13 years; 
  2.31  is eligible for a credit under this paragraph only. 
  2.32  The credit under this paragraph equals the credit that would 
  2.33  have been allowed under this section if the dependent or 
  2.34  dependents had not attained the age of 13 years at the close of 
  2.35  the taxable year.  The credit under this paragraph in 
  2.36  combination with any other credits allowed under this section is 
  3.1   subject to the limitations in subdivision 2. 
  3.2      (d) (e) If the taxpayer is not required and does not file a 
  3.3   federal individual income tax return for the tax year, no credit 
  3.4   is allowed for any amount paid to any person unless: 
  3.5      (1) the name, address, and taxpayer identification number 
  3.6   of the person are included on the return claiming the credit; or 
  3.7      (2) if the person is an organization described in section 
  3.8   501(c)(3) of the Internal Revenue Code and exempt from tax under 
  3.9   section 501(a) of the Internal Revenue Code, the name and 
  3.10  address of the person are included on the return claiming the 
  3.11  credit.  
  3.12  In the case of a failure to provide the information required 
  3.13  under the preceding sentence, the preceding sentence does not 
  3.14  apply if it is shown that the taxpayer exercised due diligence 
  3.15  in attempting to provide the information required. 
  3.16     In the case of a nonresident, part-year resident, or a 
  3.17  person who has earned income not subject to tax under this 
  3.18  chapter, the credit determined under section 21 of the Internal 
  3.19  Revenue Code must be allocated based on the ratio by which the 
  3.20  earned income of the claimant and the claimant's spouse from 
  3.21  Minnesota sources bears to the total earned income of the 
  3.22  claimant and the claimant's spouse. 
  3.23     [EFFECTIVE DATE.] This section is effective for taxable 
  3.24  years beginning after December 31, 2000.