SF 1315

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:19am

A bill for an act
relating to taxation; individual income; providing an income tax 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:

Section 1.

new text begin [290.0678] EDUCATION OPPORTUNITY CREDIT.
new text end

new text begin Subdivision 1. 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.
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new text begin (b) "Eligible individual" means an individual is a Minnesota resident who graduated
from a postsecondary educational institution located in Minnesota or from a public
postsecondary educational institution located in a state with which a tuition reciprocity
agreement under section 136A.08 was in effect when the individual graduated.
new text end

new text begin (c) "Qualified education loan" means a Federal Direct Stafford Loan issued under
United States Code, title 20, section 1078, whose terms are governed by United States
Code, title 20, section 1087e, as amended by Public Law 110-315, section 451.
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new text begin (d) "Postsecondary educational institution" means a postsecondary institution as
defined in section 136A.101, subdivision 4.
new text end

new text begin (e) "Maximum qualifying amount" is the allowance for tuition and fees calculated
for the cost of attendance under section 136A.121, subdivision 6. For an eligible
individual who graduated from a four-year postsecondary educational institution, the
maximum qualifying amount equals the average of undergraduate tuition and required fees
at the University of Minnesota Twin Cities campus determined under section 136A.121,
subdivision 6.
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new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) An eligible individual is allowed a credit against the
tax due under this chapter.
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new text begin (b) The maximum credit amount for an eligible individual equals the lesser of:
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new text begin (1) the amount the individual paid during the taxable year to pay principal and
interest on qualified education loans, not to exceed $4,000; or
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new text begin (2) the maximum qualifying amount.
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new text begin Subd. 3. new text end

new text begin Limitations. new text end

new text begin The amount of credit allowed under this section is reduced by
$1 for every $9 that the eligible individual's household income exceeds $39,000. For the
purposes of this section, "household income" has the meaning given in section 290.067,
subdivision 2a. In the case of a married eligible individual, a credit is not allowed unless a
joint income tax return is filed.
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new text begin Subd. 4. new text end

new text begin Credit carryover. new text end

new text begin If the credit provided under this section exceeds the tax
liability of the eligible individual for the taxable year, the excess amount of the credit may
be carried over to each of the ten taxable years succeeding the taxable year. The entire
amount of the credit must be carried to the earliest taxable year in which the amount may
be carried. The unused portion of the credit must be carried forward to the following
taxable year. No credit may be carried to a taxable year more than ten years after the
taxable year in which the credit was earned.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2008.
new text end