SF 1888

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; providing an income tax credit
for expenditures for postsecondary tuition and related
expenses; appropriating money; amending Minnesota
Statutes 2004, section 290.06, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 290.06, is
amended by adding a subdivision to read:

new text begin Subd. 32. new text end

new text begin Higher education tuition tax credit. new text end

new text begin (a) In
this subdivision, the following terms have the meanings given in
this paragraph.
new text end

new text begin (1) "Eligible student" includes the taxpayer, spouse, or
person claimed as a dependent of the taxpayer under section 151
of the Internal Revenue Code. An eligible student must be:
new text end

new text begin (i) a resident of Minnesota;
new text end

new text begin (ii) a graduate of a Minnesota high school or recipient of
a Minnesota general education development diploma in 2005 or
later; and
new text end

new text begin (iii) an enrolled full-time student at an eligible
Minnesota postsecondary institution.
new text end

new text begin (2) An "eligible institution" has the meaning given in
section 136A.101, subdivision 4, provided that the institution
has a physical presence in Minnesota.
new text end

new text begin (3) "Qualifying higher education expenses" means tuition
and fees actually paid during the taxable year to an eligible
institution by a taxpayer on behalf of an eligible student for
the student's first two years of postsecondary education,
reduced by:
new text end

new text begin (i) refunds of tuition and fees received from the
institution; and
new text end

new text begin (ii) the amount of any Hope Scholarship Credit or Lifetime
Learning Credit received with respect to the student under
section 25A of the Internal Revenue Code for the same taxable
year.
new text end

new text begin (b) An individual is allowed a credit against the tax
imposed by this chapter equal to the amount of qualified higher
education expenses for an eligible student. The maximum credit
allowed for each eligible student is $500 in each of the first
two years of postsecondary education.
new text end

new text begin (c) The amount of the credit otherwise payable under this
subdivision must be reduced as follows:
new text end

new text begin (1) for single taxpayers, by ten percent for every $500 by
which the taxpayer's federal adjusted gross income exceeds
$25,000; and
new text end

new text begin (2) for married taxpayers, by ten percent for every $1,000
by which the taxpayer's federal adjusted gross income exceeds
$50,000.
new text end

new text begin (d) If the amount of the credit exceeds the taxpayer's
liability under this chapter, the excess is refundable. The
amount necessary to pay the refunds is appropriated annually
from the general fund to the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable
years beginning after December 31, 2004.
new text end