SF 2325

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to child care; appropriating $5,000,000 for 
  1.3             the basic sliding fee child care assistance program; 
  1.4             requiring certain employers to offer dependent care 
  1.5             pre-tax accounts; expanding the dependent care credit; 
  1.6             amending Minnesota Statutes 1994, section 290.067, 
  1.7             subdivision 2; Minnesota Statutes 1995 Supplement, 
  1.8             section 290.067, subdivision 1; proposing coding for 
  1.9             new law in Minnesota Statutes, chapter 177. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  [177.45] [DEFINITIONS.] 
  1.12     Subdivision 1.  [SCOPE.] As used in this section and 
  1.13  177.46, the terms defined in this section have the meanings 
  1.14  given them except where the context indicates otherwise. 
  1.15     Subd. 2.  [EMPLOYER.] "Employer" means a person or entity 
  1.16  that employs 100 or more employees.  The term includes an 
  1.17  individual, corporation, partnership, association, nonprofit 
  1.18  organization, group of persons, state, county, town, city, 
  1.19  school district, or other governmental subdivision. 
  1.20     Subd. 3.  [EMPLOYEE.] "Employee" has the meaning given in 
  1.21  section 177.23. 
  1.22     Sec. 2.  [177.46] [DEPENDENT CARE PRE-TAX ACCOUNTS.] 
  1.23     An employer must offer employees the option of 
  1.24  participating in dependent care pre-tax accounts, as authorized 
  1.25  in section 129 of the Internal Revenue Code. 
  1.26     Sec. 3.  Minnesota Statutes 1995 Supplement, section 
  1.27  290.067, subdivision 1, is amended to read: 
  2.1      Subdivision 1.  [AMOUNT OF CREDIT.] (a) A taxpayer may take 
  2.2   as a credit against the tax due from the taxpayer and a spouse, 
  2.3   if any, under this chapter an amount equal to the dependent care 
  2.4   credit for which the taxpayer is eligible pursuant to the 
  2.5   provisions of who has expenses related to the care of dependents 
  2.6   may claim a credit against the tax due under this chapter.  To 
  2.7   receive a credit the taxpayer must be eligible for a dependent 
  2.8   care credit under section 21 of the Internal Revenue 
  2.9   Code subject to the limitations provided in subdivision 2 except 
  2.10  that in determining whether the child qualified as a dependent, 
  2.11  income received as an aid to families with dependent children 
  2.12  grant or allowance to or on behalf of the child must not be 
  2.13  taken into account in determining whether the child received 
  2.14  more than half of the child's support from the taxpayer, and the 
  2.15  provisions of section 32(b)(1)(D) of the Internal Revenue Code 
  2.16  do not apply. 
  2.17     (b) The maximum credit for one dependent equals 30 percent 
  2.18  of employment related expenses up to $5,000.  The maximum credit 
  2.19  for two or more dependents equals 30 percent of employment 
  2.20  related expenses up to $10,000.  The credit is subject to the 
  2.21  limitations in subdivision 2.  For purposes of this subdivision, 
  2.22  "employment related expenses" means employment related expenses 
  2.23  as defined in section 21 of the Internal Revenue Code. 
  2.24     (c) If a child who has not attained the age of six years at 
  2.25  the close of the taxable year is cared for at a licensed family 
  2.26  day care home operated by the child's parent, the taxpayer is 
  2.27  deemed to have paid employment-related expenses.  If the child 
  2.28  is 16 months old or younger at the close of the taxable year, 
  2.29  the amount of expenses deemed to have been paid equals the 
  2.30  maximum limit for one qualified individual under section 21(c) 
  2.31  and (d) of the Internal Revenue Code.  If the child is older 
  2.32  than 16 months of age but has not attained the age of six years 
  2.33  at the close of the taxable year, the amount of expenses deemed 
  2.34  to have been paid equals the amount the licensee would charge 
  2.35  for the care of a child of the same age for the same number of 
  2.36  hours of care.  
  3.1      (c) (d) If a married couple: 
  3.2      (1) has a child who has not attained the age of one year at 
  3.3   the close of the taxable year; 
  3.4      (2) files a joint tax return for the taxable year; and 
  3.5      (3) does not participate in a dependent care assistance 
  3.6   program as defined in section 129 of the Internal Revenue Code, 
  3.7   in lieu of the actual employment related expenses paid for that 
  3.8   child under paragraph (a) (b) or the deemed amount under 
  3.9   paragraph (b) (c), the lesser of (i) the combined earned income 
  3.10  of the couple or (ii) $2,400 $5,000 will be deemed to be the 
  3.11  employment related expense paid for that child.  The earned 
  3.12  income limitation of section 21(d) of the Internal Revenue Code 
  3.13  shall not apply to this deemed amount.  These deemed amounts 
  3.14  apply regardless of whether any employment-related expenses have 
  3.15  been paid.  
  3.16     (d) (e) If the taxpayer is not required and does not file a 
  3.17  federal individual income tax return for the tax year, no credit 
  3.18  is allowed for any amount paid to any person unless: 
  3.19     (1) the name, address, and taxpayer identification number 
  3.20  of the person are included on the return claiming the credit; or 
  3.21     (2) if the person is an organization described in section 
  3.22  501(c)(3) of the Internal Revenue Code and exempt from tax under 
  3.23  section 501(a) of the Internal Revenue Code, the name and 
  3.24  address of the person are included on the return claiming the 
  3.25  credit.  
  3.26  In the case of a failure to provide the information required 
  3.27  under the preceding sentence, the preceding sentence does not 
  3.28  apply if it is shown that the taxpayer exercised due diligence 
  3.29  in attempting to provide the information required. 
  3.30     In the case of a nonresident, part-year resident, or a 
  3.31  person who has earned income not subject to tax under this 
  3.32  chapter, the credit determined under section 21 of the Internal 
  3.33  Revenue Code must be allocated based on the ratio by which the 
  3.34  earned income of the claimant and the claimant's spouse from 
  3.35  Minnesota sources bears to the total earned income of the 
  3.36  claimant and the claimant's spouse. 
  4.1      Sec. 4.  Minnesota Statutes 1994, section 290.067, 
  4.2   subdivision 2, is amended to read: 
  4.3      Subd. 2.  [LIMITATIONS.] The credit for expenses incurred 
  4.4   for the care of each dependent shall not exceed $720 $1,500 in 
  4.5   any taxable year, and the total credit for all dependents of a 
  4.6   claimant shall not exceed $1,440 $3,000 in a taxable year.  The 
  4.7   maximum total credit shall be reduced according to the amount of 
  4.8   the income of the claimant and a spouse, if any, as follows:  
  4.9      income up to $13,350, $720 $30,000, $1,500 maximum for one 
  4.10  dependent, $1,440 $3,000 for all dependents; 
  4.11     income over $13,350 $30,000, the maximum credit for one 
  4.12  dependent shall be reduced by $18 for every $350 of additional 
  4.13  income, $36 for all dependents. 
  4.14     The commissioner shall construct and make available to 
  4.15  taxpayers tables showing the amount of the credit at various 
  4.16  levels of income and expenses.  The tables shall follow the 
  4.17  schedule contained in this subdivision, except that the 
  4.18  commissioner may graduate the transitions between expenses and 
  4.19  income brackets.  
  4.20     Sec. 5.  [SUPPLEMENTAL APPROPRIATION.] 
  4.21     $5,000,000 is appropriated to the commissioner of children, 
  4.22  families, and learning for the fiscal year ending June 30, 1997, 
  4.23  for the purposes of funding the basic sliding fee child care 
  4.24  assistance program under Minnesota Statutes, section 256H.03.  
  4.25  This appropriation is in addition to money appropriated for the 
  4.26  basic sliding fee program in Laws 1995, chapter 207, article 1, 
  4.27  section 2, subdivision 5.  
  4.28     Sec. 6.  [EFFECTIVE DATE.] 
  4.29     Sections 1 and 2 are effective for calendar years beginning 
  4.30  after December 31, 1996.  Sections 3 and 4 are effective for tax 
  4.31  years beginning after December 31, 1995.