SF 731

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to taxation; providing a subtraction from 
  1.3             taxable income for lump-sum long-term care insurance 
  1.4             premiums; amending Minnesota Statutes 1996, section 
  1.5             290.01, subdivision 19b; proposing coding for new law 
  1.6             in Minnesota Statutes, chapter 290. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1996, section 290.01, 
  1.9   subdivision 19b, is amended to read: 
  1.10     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
  1.11  individuals, estates, and trusts, there shall be subtracted from 
  1.12  federal taxable income: 
  1.13     (1) interest income on obligations of any authority, 
  1.14  commission, or instrumentality of the United States to the 
  1.15  extent includable in taxable income for federal income tax 
  1.16  purposes but exempt from state income tax under the laws of the 
  1.17  United States; 
  1.18     (2) if included in federal taxable income, the amount of 
  1.19  any overpayment of income tax to Minnesota or to any other 
  1.20  state, for any previous taxable year, whether the amount is 
  1.21  received as a refund or as a credit to another taxable year's 
  1.22  income tax liability; 
  1.23     (3) the amount paid to others not to exceed $650 for each 
  1.24  dependent in grades kindergarten to 6 and $1,000 for each 
  1.25  dependent in grades 7 to 12, for tuition, textbooks, and 
  1.26  transportation of each dependent in attending an elementary or 
  2.1   secondary school situated in Minnesota, North Dakota, South 
  2.2   Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
  2.3   legally fulfill the state's compulsory attendance laws, which is 
  2.4   not operated for profit, and which adheres to the provisions of 
  2.5   the Civil Rights Act of 1964 and chapter 363.  As used in this 
  2.6   clause, "textbooks" includes books and other instructional 
  2.7   materials and equipment used in elementary and secondary schools 
  2.8   in teaching only those subjects legally and commonly taught in 
  2.9   public elementary and secondary schools in this state.  
  2.10  "Textbooks" does not include instructional books and materials 
  2.11  used in the teaching of religious tenets, doctrines, or worship, 
  2.12  the purpose of which is to instill such tenets, doctrines, or 
  2.13  worship, nor does it include books or materials for, or 
  2.14  transportation to, extracurricular activities including sporting 
  2.15  events, musical or dramatic events, speech activities, driver's 
  2.16  education, or similar programs.  In order to qualify for the 
  2.17  subtraction under this clause the taxpayer must elect to itemize 
  2.18  deductions under section 63(e) of the Internal Revenue Code; 
  2.19     (4) to the extent included in federal taxable income, 
  2.20  distributions from a qualified governmental pension plan, an 
  2.21  individual retirement account, simplified employee pension, or 
  2.22  qualified plan covering a self-employed person that represent a 
  2.23  return of contributions that were included in Minnesota gross 
  2.24  income in the taxable year for which the contributions were made 
  2.25  but were deducted or were not included in the computation of 
  2.26  federal adjusted gross income.  The distribution shall be 
  2.27  allocated first to return of contributions until the 
  2.28  contributions included in Minnesota gross income have been 
  2.29  exhausted.  This subtraction applies only to contributions made 
  2.30  in a taxable year prior to 1985; 
  2.31     (5) income as provided under section 290.0802; 
  2.32     (6) the amount of unrecovered accelerated cost recovery 
  2.33  system deductions allowed under subdivision 19g; 
  2.34     (7) to the extent included in federal adjusted gross 
  2.35  income, income realized on disposition of property exempt from 
  2.36  tax under section 290.491; 
  3.1      (8) to the extent not deducted in determining federal 
  3.2   taxable income, the amount paid for health insurance of 
  3.3   self-employed individuals as determined under section 162(l) of 
  3.4   the Internal Revenue Code, except that the 25 percent limit does 
  3.5   not apply.  If the taxpayer deducted insurance payments under 
  3.6   section 213 of the Internal Revenue Code of 1986, the 
  3.7   subtraction under this clause must be reduced by the lesser of: 
  3.8      (i) the total itemized deductions allowed under section 
  3.9   63(d) of the Internal Revenue Code, less state, local, and 
  3.10  foreign income taxes deductible under section 164 of the 
  3.11  Internal Revenue Code and the standard deduction under section 
  3.12  63(c) of the Internal Revenue Code; or 
  3.13     (ii) the lesser of (A) the amount of insurance qualifying 
  3.14  as "medical care" under section 213(d) of the Internal Revenue 
  3.15  Code to the extent not deducted under section 162(1) of the 
  3.16  Internal Revenue Code or excluded from income or (B) the total 
  3.17  amount deductible for medical care under section 213(a); and 
  3.18     (9) the exemption amount allowed under Laws 1995, chapter 
  3.19  255, article 3, section 2, subdivision 3; and 
  3.20     (10) to the extent not deducted in determining federal 
  3.21  taxable income, the amount of a lump-sum premium paid for 
  3.22  long-term care insurance as provided in section 290.0803. 
  3.23     Sec. 2.  [290.0803] [LONG-TERM CARE INSURANCE PREMIUM 
  3.24  SUBTRACTION.] 
  3.25     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  3.26  section, the following terms have the meanings given. 
  3.27     (b) "Long-term care insurance" means a policy that meets 
  3.28  the requirements of sections 62A.46 to 62A.56 or a policy 
  3.29  providing similar coverage issued under the laws of another 
  3.30  jurisdiction.  
  3.31     (c) "Qualified beneficiary" means the taxpayer or the 
  3.32  taxpayer's spouse.  
  3.33     Subd. 2.  [SUBTRACTION.] An individual is allowed a 
  3.34  subtraction from federal taxable income for a premium paid 
  3.35  during the taxable year for a long-term care insurance policy, 
  3.36  provided that the terms of the policy require payment of a 
  4.1   single premium when the policy is purchased, and the policy then 
  4.2   remains in effect for the life of the insured.  A taxpayer may 
  4.3   claim a credit for only one policy for each qualified 
  4.4   beneficiary. 
  4.5      Sec. 3.  [EFFECTIVE DATE.] 
  4.6      Sections 1 and 2 are effective for taxable years beginning 
  4.7   after December 31, 1996.