SF 165

as introduced - 90th Legislature (2017 - 2018) Posted on 01/20/2017 08:56am

A bill for an act
relating to taxation; individual income; allowing a refundable student loan credit;
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 [290.0682] STUDENT LOAN 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.
new text end

new text begin (b) "Eligible individual" means an individual who has one or more qualified education
loans related to an undergraduate or graduate degree program at a postsecondary educational
institution.
new text end

new text begin (c) "Modified adjusted gross income" has the meaning given in section 221(b)(2)(C) of
the Internal Revenue Code.
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new text begin (d) "Postsecondary educational institution" means a postsecondary institution eligible
for state student aid under section 136A.103, or, if the institution is not located in this state,
a postsecondary institution participating in the federal Pell Grant program under Title IV
of the Higher Education Act of 1965, Public Law 89-329, as amended.
new text end

new text begin (e) "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 eligible individual
or the eligible individual's spouse.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed; limitation. new text end

new text begin (a) An eligible individual or the parent of an eligible
individual is allowed a credit against the tax due under this chapter.
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new text begin (b) The credit for an eligible individual equals the amount the eligible individual paid
during the taxable year to pay principal and interest on qualified education loans up to
$5,000.
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new text begin (c) The credit for the parent of an eligible individual equals the amount the parent of the
eligible individual paid during the taxable year to pay principal and interest on qualified
education loans of the eligible individual, up to $5,000, less the amount of credit allowed
to the eligible individual under paragraph (b).
new text end

new text begin (d) For married couples filing joint returns, the maximum credit is reduced by $1 for
every $6 of modified adjusted gross income in excess of $130,000. For all other filers, the
maximum credit is reduced by $1 for every $3 of modified adjusted gross income in excess
of $65,000. In no case is the maximum credit less than zero.
new text end

new text begin (e) For a nonresident or part-year resident, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin Subd. 3. new text end

new text begin Credit refundable. new text end

new text begin If the amount of credit that an individual who is a resident
or part-year resident of Minnesota is eligible to receive under this section exceeds the
individual's tax liability under this chapter, the commissioner shall refund the excess to the
individual. For nonresident taxpayers, the credit must not exceed the taxpayer's liability for
tax under this chapter.
new text end

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, 2016.
new text end