SF 2493

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/03/2023 10:48am

A bill for an act
relating to taxation; individual income; establishing a refundable child 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 [290.0124] MINNESOTA CHILD CREDIT.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the following terms have
the meanings given:
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new text begin (1) "older child" means a qualifying child of the taxpayer who has attained the age of
four, but has not attained the age of 18 as of the close of the calendar year in which the
taxable year of the taxpayer begins;
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new text begin (2) "qualifying child" has the meaning given in section 152(c) of the Internal Revenue
Code; and
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new text begin (3) "young child" means:
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new text begin (i) a qualifying child of the taxpayer who has not attained the age of four as of the close
of the calendar year in which the taxable year of the taxpayer begins; or
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new text begin (ii) an unborn child with a gestational age of at least 28 weeks as of December 31 of the
previous taxable year, but who otherwise meets the requirements to be considered a qualifying
child.
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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 individual income taxpayer is allowed a credit against
the tax imposed under this chapter equal to the sum of:
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new text begin (1) $1,800 for each young child of the taxpayer; and
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new text begin (2) $1,200 for each older child of the taxpayer.
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new text begin (b) The credit is reduced by ten percent of adjusted gross income in excess of:
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new text begin (1) $125,000 for a married taxpayer filing a joint return;
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new text begin (2) $100,000 for a head of household taxpayer; and
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new text begin (3) $62,500 for all other taxpayers.
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new text begin Subd. 3. new text end

new text begin Credit refundable. new text end

new text begin (a) If the amount of credit which a claimant is eligible to
receive under this section exceeds the claimant's tax liability under this chapter, the
commissioner shall refund the excess to the claimant.
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new text begin (b) 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 Subd. 4. new text end

new text begin Advance payment of tax credits. new text end

new text begin (a) By January 1, 2024, the commissioner
of revenue must allow taxpayers to elect to receive six periodic advance payments of the
credit under this section. The aggregate amount of advance payments made to a taxpayer
during a calendar year must equal the amount of the credit for which the taxpayer would
be eligible in the taxable year ending in the calendar year based on the age of the child,
disregarding any reduction in the credit based on the taxpayer's adjusted gross income. The
commissioner must not distribute advance payments to a taxpayer who does not elect to
receive advance payments. The process for applying for and distributing payments must
include:
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new text begin (1) a process for a taxpayer to elect to receive and cease receiving advance payments;
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new text begin (2) a process for distributing advance payments to taxpayers through direct deposit,
United States mail, or any other method deemed appropriate by the commissioner; and
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new text begin (3) a process for informing taxpayers of the amount of advance payments received in
the calendar year.
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new text begin (b) The amount of a taxpayer's credit under this section for a taxable year is reduced by
the amount of advance payments under this section for the calendar year in which the taxable
year began.
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new text begin (c) If a taxpayer's advance payments for the calendar year in which the taxable year
began exceeded the credit the taxpayer was eligible to receive for the taxable year, the
taxpayer's liability for tax is increased by the difference between the amount of advance
payments received and the credit amount.
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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, 2022.
new text end