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Minnesota Legislature

Office of the Revisor of Statutes

SF 452

as introduced - 91st Legislature (2019 - 2020) Posted on 01/24/2019 02:56pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to taxation; individual income; providing a subtraction for foster child
dependents; amending Minnesota Statutes 2018, sections 290.0132, by adding a
subdivision; 290.091, subdivision 2.

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

Section 1.

Minnesota Statutes 2018, section 290.0132, is amended by adding a subdivision
to read:


new text begin Subd. 27. new text end

new text begin Foster child dependents. new text end

new text begin (a) An amount equal to the sum of the taxpayer's
dependent foster child exemptions, less the disallowed exemption amount determined under
paragraph (c), is a subtraction.
new text end

new text begin (b) A taxpayer's dependent foster child exemption equals $4,150 for each individual
who is a qualifying foster child.
new text end

new text begin (c) The disallowed exemption amount equals the sum of the taxpayer's dependent foster
child exemptions multiplied by the applicable percentage. For a married individual filing a
separate return, "applicable percentage" means two percentage points for each $1,250, or
fraction of that amount, by which the taxpayer's federal adjusted gross income for the taxable
year exceeds the threshold amount. For all other filers, applicable percentage means two
percentage points for each $2,500, or fraction of that amount, by which the taxpayer's federal
adjusted gross income for the taxable year exceeds the threshold amount. The applicable
percentage must not exceed 100 percent.
new text end

new text begin (d) For purposes of this subdivision, the following definitions apply:
new text end

new text begin (1) "qualifying foster child" means an individual who:
new text end

new text begin (i) has the same principal place of abode as the taxpayer for at least one month of the
taxable year; and
new text end

new text begin (ii) is placed with the taxpayer by an authorized placement agency or by judgment,
decree, or other order of any court of competent jurisdiction; and
new text end

new text begin (2) "threshold amount" means:
new text end

new text begin (i) $285,050 for a joint return or a surviving spouse;
new text end

new text begin (ii) $237,550 for a head of a household;
new text end

new text begin (iii) $190,050 for an individual who is not married and who is not a surviving spouse
or head of a household; and
new text end

new text begin (iv) $142,500 for a married individual filing a separate return.
new text end

new text begin (e) The subtraction is not allowed for taxpayers who claim the exemption amount under
section 151(d) of the Internal Revenue Code for an eligible foster child as defined under
section 152(f) of the Internal Revenue Code.
new text end

new text begin (f) For taxable years beginning after December 31, 2019, the commissioner must adjust
the amounts in paragraphs (b), (c), and (d) for inflation by the percentage determined under
paragraph (g). The commissioner must round the amounts to the nearest $50 amounts. If
the amounts end in $25, the commissioner must round them up to the nearest $50 amounts.
new text end

new text begin (g) The commissioner must adjust the amounts in this subdivision using the Consumer
Price Index for All Urban Consumers. For 2020, the commissioner must determine the
percent change from the 12 months ending on August 31, 2018, to the 12 months ending
on August 31, 2019, and in each subsequent year, from the 12 months ending on August
31, 2018, to the 12 months ending on August 31 of the year preceding the taxable year.
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, 2018.
new text end

Sec. 2.

Minnesota Statutes 2018, section 290.091, subdivision 2, is amended to read:


Subd. 2.

Definitions.

For purposes of the tax imposed by this section, the following
terms have the meanings given.

(a) "Alternative minimum taxable income" means the sum of the following for the taxable
year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a disabled person;

(3) for depletion allowances computed under section 613A(c) of the Internal Revenue
Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
to the extent not included in federal alternative minimum taxable income, the excess of the
deduction for depletion allowable under section 611 of the Internal Revenue Code for the
taxable year over the adjusted basis of the property at the end of the taxable year (determined
without regard to the depletion deduction for the taxable year);

(4) to the extent not included in federal alternative minimum taxable income, the amount
of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative minimum taxable income, the amount
of interest income as provided by section 290.0131, subdivision 2; deleted text beginand
deleted text end

(6)new text begin the amount of the subtraction allowed under section 290.0132, subdivision 27; and
new text end

new text begin (7)new text end the amount of addition required by section 290.0131, subdivisions 9 to 11;

less the sum of the amounts determined under the following:

(i) interest income as defined in section 290.0132, subdivision 2;

(ii) an overpayment of state income tax as provided by section 290.0132, subdivision
3
, to the extent included in federal alternative minimum taxable income;

(iii) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as defined
in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
in computing federal adjusted gross income;

(iv) amounts subtracted from federal taxable income as provided by section 290.0132,
subdivisions 7
, 9 to 15, 17, 21, 24, and 26; and

(v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
paragraph (c).

In the case of an estate or trust, alternative minimum taxable income must be computed
as provided in section 59(c) of the Internal Revenue Code.

(b) "Investment interest" means investment interest as defined in section 163(d)(3) of
the Internal Revenue Code.

(c) "Net minimum tax" means the minimum tax imposed by this section.

(d) "Regular tax" means the tax that would be imposed under this chapter (without regard
to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
under this chapter.

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
after subtracting the exemption amount determined under subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2018.
new text end