as introduced - 88th Legislature (2013 - 2014) Posted on 02/19/2013 08:34am
A bill for an act
relating to taxes; individual income; providing a refundable credit for payment
of principal and interest on student loans; proposing coding for new law in
Minnesota Statutes, chapter 290.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
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(a) For purposes of this section, the following terms
have the meanings given.
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(b) "Allowance for tuition and fees" is the amount set in law as required under
section 136A.121, subdivision 6.
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(c) "Eligible individual" means an individual who is a Minnesota resident who
completed a degree program at a postsecondary educational institution located in Minnesota
or at a public postsecondary educational institution located in a state that had a tuition
reciprocity agreement under section 136A.08 in effect when the individual graduated.
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(d) "Postsecondary educational institution" means a public postsecondary institution
or a private, nonprofit, degree-granting institution.
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(e) "Qualified education loan" has the meaning given in section 221 of the Internal
Revenue Code, but is limited to indebtedness incurred:
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(1) through a federal subsidized Perkins or Stafford loan;
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(2) on behalf of the taxpayer or taxpayer's spouse; and
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(3) to pay tuition and fees for academic year 2012-2013 or later.
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For an eligible individual who completed
a degree program at a two-year postsecondary educational institution, the maximum
qualifying amount equals the allowance for tuition and fees specified for a two-year
institution for the individual's final year of attendance, and for an eligible individual
who completed a degree program at a four-year postsecondary educational institution,
the maximum qualifying amount equals the allowance for tuition and fees specified for a
four-year institution for the individual's final year of attendance.
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(a) An eligible individual is allowed a credit against the
tax due under this chapter.
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(b) The credit amount equals the least of:
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(1) the amount the individual paid during the taxable year to pay principal and
interest on qualified education loans;
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(2) the maximum qualifying amount; or
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(3) $500.
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If the amount of credit which a taxpayer is eligible
to receive under this section exceeds the taxpayer's tax liability under this chapter, the
commissioner shall refund the excess to the taxpayer.
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An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner from the general fund.
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This section is effective for taxable years beginning after
December 31, 2012.
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