SF 1315

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:19am

A bill for an act
relating to taxation; individual income; providing a refundable credit for payment
of principal and interest on student loans; appropriating money; 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 who:
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new text begin (1) 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; and
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new text begin (2) has a household income under $75,000. For purposes of this section, "household
income" means income as described in section 290.067, subdivision 2a.
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new text begin (c) "Eligible employer" means an employer of an eligible individual who undertakes
partial or full payment of the eligible individual's qualified education loan.
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new text begin (d) "Qualified education loan" has the meaning given in section 221 of the Internal
Revenue Code, but is limited to indebtedness incurred on behalf of the taxpayer or
taxpayer's spouse.
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new text begin (e) "Postsecondary educational institution" means a two- or four-year postsecondary
educational institution that meets the definition of "eligible educational institution"
provided in section 221(d)(2)(B) of the Internal Revenue Code.
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new text begin (f) "Maximum qualifying amount" is the allowance for tuition and fees most recently
set in law as required under section 136A.121, subdivision 6. For an eligible individual
who graduated from a two-year postsecondary educational institution, the maximum
qualifying amount equals the allowance for tuition and fees specified for a two-year
institution, and for an eligible individual who graduated from a four-year postsecondary
educational institution, the maximum qualifying amount equals the allowance for tuition
and fees specified for a four-year institution.
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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 or an eligible employer is
allowed a credit against the tax due under this chapter.
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new text begin (b) The 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; or
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new text begin (2) the maximum qualifying amount.
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new text begin (c) An eligible employer may only claim the credit based on qualified education
loan payments made on behalf of the eligible individual in months in which the eligible
individual did not make payments. The credit amount for an eligible employer equals
the least of:
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new text begin (1) the amount the eligible employer paid during the taxable year to pay principal
and interest on qualified education loans of an eligible individual;
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new text begin (2) the maximum qualifying amount; or
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new text begin (3) the amount the eligible individual would have been able to claim had the eligible
individual made the payments in place of the employer.
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new text begin Subd. 3. new text end

new text begin Credit refundable. new text end

new text begin 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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new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner from the general fund.
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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