Minnesota Legislature
HF 3589
as introduced - 89th Legislature (2015 - 2016) Posted on 03/24/2016 02:25pm
Current Version - as introduced
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A bill for an act
relating to taxation; individual income; modifying the working family income
tax credit; amending Minnesota Statutes 2015 Supplement, section 290.0671,
subdivision 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2015 Supplement, section 290.0671, subdivision 1,
is amended to read:
Subdivision 1.
Credit allowed.
(a) An individual who is a resident of Minnesota 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 Codenew text begin without regard to the earned income or adjusted gross
income limitationsnew text end .
(b) For individuals with no qualifying children, the credit equals deleted text begin 2.10deleted text end new text begin 3.0new text end percent
of the first deleted text begin $6,180deleted text end new text begin $6,500new text end of earned income. The credit is reduced by deleted text begin 2.01deleted text end new text begin 3.0new text end percent
of earned income or adjusted gross income, whichever is greater, in excess of deleted text begin $8,130
deleted text end new text begin $12,000new text end , but in no case is the credit less than zero.new text begin For individuals qualifying under
this paragraph, the taxpayer must have been at least 21 years of age, but under 65 years
of age, at the end of the tax year.
new text end
(c) For individuals with one qualifying child, the credit equals deleted text begin 9.35deleted text end new text begin 12.71new text end percent
of the first deleted text begin $11,120deleted text end new text begin $8,350 new text end of earned income. The credit is reduced by deleted text begin 6.02deleted text end new text begin 5.2new text end percent
of earned income or adjusted gross income, whichever is greater, in excess of deleted text begin $21,190
deleted text end new text begin $21,620new text end , 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 11deleted text end new text begin 14.94
new text end percent of the first deleted text begin $18,240deleted text end new text begin $13,700new text end of earned income. The credit is reduced by deleted text begin 10.82
deleted text end new text begin 9.2new text end percent of earned income or adjusted gross income, whichever is greater, in excess of
deleted text begin $25,130deleted text end new text begin $25,640new text end , but in no case is the credit less than zero.
(e) For a 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) deleted text begin For tax years beginning after December 31, 2007, and before December 31,
2010, and for tax years beginning after December 31, 2017, the $8,130 in paragraph (b),
the $21,190 in paragraph (c), and the $25,130 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.
deleted text end
deleted text begin (h)(1) For tax years beginning after December 31, 2012, and before January 1, 2014,
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 increased by $5,340 for
married taxpayers filing joint returns; and (2)deleted text end For tax years beginning after December 31,
deleted text begin 2013deleted text end new text begin 2015new text end , deleted text begin and before January 1, 2018,deleted text end the deleted text begin $8,130deleted text end new text begin $12,000new text end in paragraph (b), the deleted text begin $21,190
deleted text end new text begin $21,620new text end in paragraph (c), and the deleted text begin $25,130deleted text end new text begin $25,640new text end in paragraph (d), after being adjusted for
inflation under subdivision 7, are each increased by deleted text begin $5,000deleted text end new text begin $5,550 new text end for married taxpayers
filing joint returns. For deleted text begin tax years beginning after December 31, 2010, and before January
1, 2012, and fordeleted text end tax years beginning after December 31, deleted text begin 2013deleted text end new text begin 2016new text end , deleted text begin and before January
1, 2018,deleted text end the commissioner shall annually adjust the deleted text begin $5,000deleted text end new text begin $5,550 new text end 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 deleted text begin "2008"deleted text end new text begin "2015" new text end shall be substituted for the word "1992."
For deleted text begin 2011deleted text end new text begin 2017new text end , the commissioner shall then determine the percent change from the 12
months ending on August 31, deleted text begin 2008deleted text end new text begin 2015new text end , to the 12 months ending on August 31, deleted text begin 2010
deleted text end new text begin 2016new text end , and in each subsequent year, from the 12 months ending on August 31, deleted text begin 2008deleted text end new text begin 2015new text end ,
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.
(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 tax years beginning after
December 31, 2015.
new text end