Minnesota Legislature
SF 2484
as introduced - 88th Legislature (2013 - 2014) Posted on 03/11/2014 09:45am
1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 2.34 2.35 2.36 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11
3.12 3.13
3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27
3.28 3.29
A bill for an act
relating to taxation; individual income; extending the working family credit
phaseout for married filers to conform to the Internal Revenue Code; increasing
the maximum allowed credit; amending Minnesota Statutes 2012, section
290.0671, subdivisions 1, 7.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2012, section 290.0671, subdivision 1, is amended to read:
Subdivision 1.
Credit allowed.
(a) An individual is allowed a credit against the tax
imposed by this chapter equal to a percentage of earned income. To receive a credit, a
taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
(b) For individuals with no qualifying children, the credit equals deleted text begin 1.9125deleted text end new text begin 2.87new text end percent
of the first deleted text begin $4,620deleted text end new text begin $4,980new text end of earned income. The credit is reduced by deleted text begin 1.9125deleted text end new text begin 2.39new text end percent
of earned income or adjusted gross income, whichever is greater, in excess of deleted text begin $5,770
deleted text end new text begin $8,620new text end , but in no case is the credit less than zero.
(c) For individuals with one qualifying child, the credit equals deleted text begin 8.5deleted text end new text begin 12.75new text end percent of
the first deleted text begin $6,920deleted text end new text begin $8,930new text end of earned income deleted text begin and 8.5 percent of earned income over $12,080
but less than deleted text end deleted text begin $13,450deleted text end . The credit is reduced by deleted text begin 5.73deleted text end new text begin 7.16new text end percent of earned income or
adjusted gross income, whichever is greater, in excess of deleted text begin $15,080deleted text end new text begin $22,560new text end , but in no
case is the credit less than zero.
(d) For individuals with two or more qualifying children, the credit equals deleted text begin tendeleted text end new text begin 15
new text end percent of the first deleted text begin $9,720deleted text end new text begin $14,650new text end of earned income deleted text begin and 20 percent of earned income
over $14,860 but less than $16,800deleted text end . The credit is reduced by deleted text begin 10.3deleted text end new text begin 12.88new text end percent of earned
income or adjusted gross income, whichever is greater, in excess of deleted text begin $17,890deleted text end new text begin $26,620new text end ,
but in no case is the credit less than zero.
(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).
(f) For a person who was a resident for the entire tax year and has earned income
not subject to tax under this chapter, including income excluded under section 290.01,
subdivision 19b, clause (9), the credit must be allocated based on the ratio of federal
adjusted gross income reduced by the earned income not subject to tax under this chapter
over federal adjusted gross income. For purposes of this paragraph, the subtractions
for military pay under section 290.01, subdivision 19b, clauses (10) and (11), are not
considered "earned income not subject to tax under this chapter."
For the purposes of this paragraph, the exclusion of combat pay under section 112
of the Internal Revenue Code is not considered "earned income not subject to tax under
this chapter."
(g) For tax years beginning after December 31, 2007, and before December 31, 2010,
new text begin and for tax years beginning after December 31, 2017, new text end the deleted text begin $5,770deleted text end new text begin $8,620new text end in paragraph
(b), the deleted text begin $15,080deleted text end new text begin $22,560new text end in paragraph (c), and the deleted text begin $17,890deleted text end new text begin $26,620new text end in paragraph (d),
after being adjusted for inflation under subdivision 7, are each increased by $3,000 for
married taxpayers filing joint returns. For tax years beginning after December 31, 2008,
the commissioner shall annually adjust the $3,000 by the percentage determined pursuant
to the provisions of section 1(f) of the Internal Revenue Code, except that in section
1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009, the
commissioner shall then determine the percent change from the 12 months ending on
August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent
year, from the 12 months ending on August 31, 2007, to the 12 months ending on August
31 of the year preceding the taxable year. The earned income thresholds as adjusted
for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount
is rounded up to the nearest $10. The determination of the commissioner under this
subdivision is not a rule under the Administrative Procedure Act.
(h) For tax years beginning after December 31, 2010, and before January 1, 2012,new text begin and
for tax years beginning after December 31, 2013, and before January 1, 2018,new text end the deleted text begin $5,770
deleted text end new text begin $8,620new text end in paragraph (b), the deleted text begin $15,080deleted text end new text begin $22,560new text end in paragraph (c), and the deleted text begin $17,890deleted text end new text begin $26,620new text end in
paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
$5,000 for married taxpayers filing joint returns. For tax years beginning after December
31, 2010, and before January 1, 2012, new text begin and for tax years beginning after December 31,
2013, and before January 1, 2018, new text end the commissioner shall annually adjust the $5,000
by the percentage determined pursuant to the provisions of section 1(f) of the Internal
Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for
the word "1992." For 2011, the commissioner shall then determine the percent change
from the 12 months ending on August 31, 2008, to the 12 months ending on August 31,
2010new text begin , and in each subsequent year, from the 12 months ending on August 31, 2008, to
the 12 months ending on August 31 of the year preceding the taxable yearnew text end . The earned
income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
commissioner under this subdivision is not a rule under the Administrative Procedure Act.
(i) The commissioner shall construct tables showing the amount of the credit at
various income levels and make them available to taxpayers. The tables shall follow
the schedule contained in this subdivision, except that the commissioner may graduate
the transition between income brackets.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after
December 31, 2013.
new text end
Sec. 2.
Minnesota Statutes 2012, section 290.0671, subdivision 7, is amended to read:
Subd. 7.
Inflation adjustment.
The earned income amounts used to calculate
the credit and the income thresholds at which the maximum credit begins to be reduced
in subdivision 1 must be adjusted for inflation. The commissioner shall adjust by the
percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue
Code, except that in section 1(f)(3)(B) the word deleted text begin "1999"deleted text end new text begin "2013"new text end shall be substituted for
the word "1992." For deleted text begin 2001deleted text end new text begin 2015new text end , the commissioner shall then determine the percent
change from the 12 months ending on August 31, deleted text begin 1999deleted text end new text begin 2013new text end , to the 12 months ending
on August 31, deleted text begin 2000deleted text end new text begin 2014new text end , and in each subsequent year, from the 12 months ending on
August 31, deleted text begin 1999deleted text end new text begin 2013new text end , to the 12 months ending on August 31 of the year preceding the
taxable year. The earned income thresholds as adjusted for inflation must be rounded to
the nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest
$10 amount. The determination of the commissioner under this subdivision is not a rule
under the Administrative Procedure Act.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after
December 31, 2013.
new text end