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HF 1234

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/22/2021 04:19pm

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

Bill Text Versions

Engrossments
Introduction Posted on 02/18/2021

Current Version - as introduced

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A bill for an act
relating to taxation; individual income; making the student loan credit refundable;
modifying the credit calculation for married taxpayers filing joint returns; amending
Minnesota Statutes 2020, section 290.0682.

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

Section 1.

Minnesota Statutes 2020, section 290.0682, is amended to read:


290.0682 STUDENT LOAN CREDIT.

Subdivision 1.

Definitions.

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

(b) "Adjusted gross income" means federal adjusted gross income as defined in section
62 of the Internal Revenue Code.

(c) "Earned income" has the meaning given in section deleted text begin32(c) of the Internal Revenue
Code
deleted text endnew text begin 290.0675, subdivision 1, paragraph (b)new text end.

(d) "Eligible individual" means a resident individual with one or more qualified education
loans related to an undergraduate or graduate degree program at a postsecondary educational
institution.

(e) "Eligible loan payments" means the amount the eligible individual paid during the
taxable year in principal and interest on qualified education loans.

(f) "Postsecondary educational institution" means a public or nonprofit postsecondary
institution eligible for state student aid under section 136A.103 or, if the institution is not
located in this state, a public or nonprofit postsecondary institution participating in the
federal Pell Grant program under title IV of the Higher Education Act of 1965, Public Law
89-329, as amended.

(g) "Qualified education loan" has the meaning given in section 221 of the Internal
Revenue Code, but is limited to indebtedness incurred on behalf of the eligible individual.

Subd. 2.

Credit allowed.

(a) An eligible individual is allowed a credit against the tax
due under this chapter.

(b) The credit for an eligible individual equals the least of:

(1) eligible loan payments minus ten percent of an amount equal to adjusted gross income
in excess of $10,000, but in no case less than zero;

(2) the earned income for the taxable year of the eligible individual, if any;

(3) the sum of:

(i) the interest portion of eligible loan payments made during the taxable year; and

(ii) ten percent of the original loan amount of all qualified education loans of the eligible
individual; or

(4) $500.

(c) For a part-year resident, the credit must be allocated based on the percentage calculated
under section 290.06, subdivision 2c, paragraph (e).

(d) In the case of a married couple, each spouse is eligible for the credit in this section.new text begin
For the purposes of paragraph (b), for married taxpayers filing joint returns, each spouse's
adjusted gross income equals the spouse's percentage share of the couple's earned income,
multiplied by the taxpayer's adjusted gross income.
new text end

new text begin Subd. 3. new text end

new text begin Credit refundable; appropriation. 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.
new text end

new text begin (b) An amount sufficient to pay the refunds required by this section is appropriated to
the commissioner from the general fund.
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, 2020.
new text end