SF 1406

as introduced - 91st Legislature (2019 - 2020) Posted on 02/18/2019 03:10pm

A bill for an act
relating to taxation; individual income; extending the subtraction for first-time
home buyer savings accounts to contributions; providing a subtraction for certain
employer contributions; amending Minnesota Statutes 2018, sections 290.0131,
subdivision 14; 290.0132, subdivision 25; 290.0134, by adding a subdivision;
462D.03, subdivision 5; 462D.06, subdivisions 1, 3.

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

Section 1.

Minnesota Statutes 2018, section 290.0131, subdivision 14, is amended to read:

Subd. 14.

First-time home buyer savings account.

new text begin (a) For purposes of this subdivision,
the terms defined in section 462D.02 have the meanings given in that section.
new text end

new text begin (b) new text end The amount for a first-time home buyer savings account required by section 462D.06,
subdivision 2, is an addition.

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 290.0132, subdivision 25, is amended to read:

Subd. 25.

First-time home buyer savings account.

(a) For purposes of this subdivision,
the terms defined in section 462D.02 have the meanings given in that section.

(b) The new text begin amount of contributions to and new text end earnings on a first-time home buyer savings
account allowed by section 462D.06, subdivision 1, is a subtraction. new text begin The subtraction allowed
under this subdivision for a taxable year is limited to $10,000 for married joint filers and
$5,000 for all other filers, except for employers as provided in paragraph (d). For taxpayers
with adjusted gross income, as defined in section 62 of the Internal Revenue Code, for the
taxable year in excess of a threshold amount, the maximum subtraction is reduced by $1
for each $4 of adjusted gross income in excess of the threshold. The threshold is $250,000
for married joint filers and $125,000 for all other filers.
new text end

new text begin (c) The adjusted gross income thresholds under paragraph (b) are annually adjusted for
inflation. Effective for taxable year 2020, the commissioner shall adjust the dollar amount
of the income thresholds at which the maximum subtraction begins to be reduced under
paragraph (b) by the percentage determined under section 1(f) of the Internal Revenue Code,
except that in section 1(f)(3)(B) the word "2016" is substituted for the word "1992." For
2020, the commissioner shall then 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. The determination of the commissioner under
this subdivision is not a "rule" and is not subject to the Administrative Procedure Act in
chapter 14. The threshold amount as adjusted must be rounded to the nearest $100 amount.
If the amount ends in $50, the amount is rounded up to the nearest $100 amount.
new text end

new text begin (d) Employers may claim a subtraction under this subdivision for contributions made
to an employee's first-time home buyer savings account. For purposes of this paragraph,
"employer" and "employee" have the meanings given in section 290.92, subdivision 1. The
subtraction equals the amount of the employer's contributions to an employee's first-time
home buyer savings account in a taxable year up to $1,000 per employee.
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. 3.

Minnesota Statutes 2018, section 290.0134, is amended by adding a subdivision
to read:

new text begin Subd. 17. new text end

new text begin Employer contribution to first-time home buyer savings
account. new text end

new text begin Contributions made by an employer to an employee's first-time home buyer savings
account as allowed by section 462D.06, subdivision 1, are a subtraction. For purposes of
this paragraph, "employer" and "employee" have the meanings given in section 290.92,
subdivision 1. The subtraction equals the amount of the employer's contributions to an
employee's first-time home buyer savings account in a taxable year up to $1,000 per
employee.
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. 4.

Minnesota Statutes 2018, section 462D.03, subdivision 5, is amended to read:

Subd. 5.

Contributions.

Only cash may be contributed to a first-time home buyer savings
account. Individuals other than the account holder may contribute to an account. deleted text begin No more
than $14,000 ($28,000 for married joint filers) may be contributed in any year and no more
than $50,000 ($100,000 for married joint filers) may be contributed in all years. The
maximum amount in any account is limited to $150,000. deleted text end new text begin No limitation applies to the amount
of contributions that may be made to or retained in a first-time home buyer savings account.
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. 5.

Minnesota Statutes 2018, section 462D.06, subdivision 1, is amended to read:

Subdivision 1.

Subtraction.

(a) As provided in section 290.0132, subdivision 25, an
account holder is allowed a subtraction from the federal taxable income equal to new text begin the sum
of:
new text end

new text begin (1) the amount the account holder contributes to a first-time home buyer savings account
during the taxable year, not to exceed $5,000, or $10,000 for a married couple filing a joint
return; and
new text end

new text begin (2) new text end interest or dividends earned on the first-time home buyer savings account during the
taxable year.

(b) The subtraction under paragraph (a) is allowed each year for the taxable years
including and following the taxable year in which the account was established. No person
other than the account holder new text begin , or an employer as provided under section 290.0132,
subdivision 25, paragraph (d), and section 290.0134, subdivision 17, new text end is allowed a subtraction
under this section.

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. 6.

Minnesota Statutes 2018, section 462D.06, subdivision 3, is amended to read:

Subd. 3.

Additional tax.

new text begin As provided in section 290.06, subdivision 2g, new text end the account
holder is liable for an additional tax equal to ten percent of the addition under subdivision
2 for the taxable year. This amount must be added to the amount due under section 290.06.
The tax under this subdivision does not apply to:

(1) a withdrawal because of the account holder's or designated qualified beneficiary's
death or disability;

(2) a disbursement of assets of the account under federal bankruptcy law; and

(3) a disbursement of assets of the account under chapter 550 or 551.

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