SF 3978

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/15/2022 09:10am

A bill for an act
relating to taxation; individual income; modifying the inflation protection
requirements for policies qualifying for the state long-term care insurance credit;
providing a phaseout for the credit; amending Minnesota Statutes 2020, section
290.0672, subdivisions 1, 2.

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

Section 1.

Minnesota Statutes 2020, section 290.0672, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have
the meanings given.

(b) "Long-term care insurance" means a policy that:

(1) qualifies for a deduction under section 213 of the Internal Revenue Code, disregarding
the adjusted gross income test; or meets the requirements given in section 62A.46; or provides
similar coverage issued under the laws of another jurisdiction; and

(2) has a lifetime long-term care benefit limit of not less than $100,000; and

(3) has been offered in compliance with the inflation protection requirements of section
62S.23 new text begin , but was not rejected by the policyholder under subdivision 6 of that section new text end .

(c) "Qualified beneficiary" means the taxpayer or the taxpayer's spouse.

(d) "Premiums deducted in determining net income" means the lesser of (1) long-term
care insurance premiums that qualify as deductions under section 213 of the Internal Revenue
Code; and (2) the total amount deducted for medical care under section 290.0122, subdivision
6.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 2.

Minnesota Statutes 2020, section 290.0672, subdivision 2, is amended to read:

Subd. 2.

Credit.

new text begin (a) new text end A taxpayer is allowed a credit against the tax imposed by this chapter
for long-term care insurance policy premiums paid during the tax year. The credit for each
policy equals 25 percent of premiums paid to the extent not deducted in determining taxable
net income. A taxpayer may claim a credit for only one policy for each qualified beneficiary.
A maximum of $100 applies to each qualified beneficiary. The maximum total credit allowed
per year is $200 for married couples filing joint returns and $100 for all other filers. For a
nonresident or part-year resident, the credit determined under this section must be allocated
based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

new text begin (b) The credit is reduced by five percent of adjusted gross income in excess of:
new text end

new text begin (1) $150,000 for a married taxpayer filing a joint return; or
new text end

new text begin (2) $75,000 for all other filing statuses.
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, 2021.
new text end