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HF 1373

as introduced - 92nd Legislature (2021 - 2022) Posted on 04/19/2022 11:23am

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

Bill Text Versions

Engrossments
Introduction Posted on 02/22/2021

Current Version - as introduced

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A bill for an act
relating to taxation; individual income; increasing amount of allowed expenses
and income limits for the Minnesota education credit; amending Minnesota Statutes
2020, section 290.0674, subdivisions 1, 2.

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

Section 1.

Minnesota Statutes 2020, section 290.0674, subdivision 1, is amended to read:


Subdivision 1.

Credit allowed; definitions.

An individual is allowed a credit against
the tax imposed by this chapter in an amount equal to 75 percent of the amount paid for
education-related expenses for a qualifying child in kindergarten through grade 12. For
purposes of this section, "education-related expenses" means:

(1) fees or tuition for instruction by an instructor under section 120A.22, subdivision
10
, clause (1), (2), (3), (4), or (5), or a member of the Minnesota Music Teachers Association,
and who is not a lineal ancestor or sibling of the dependent for instruction outside the regular
school day or school year, including tutoring, driver's education offered as part of school
curriculum, regardless of whether it is taken from a public or private entity or summer
camps, in grade or age appropriate curricula that supplement curricula and instruction
available during the regular school year, that assists a dependent to improve knowledge of
core curriculum areas or to expand knowledge and skills under the required academic
standards under section 120B.021, subdivision 1, and the world languages standards under
section 120B.022, subdivision 1, and that do not include the teaching of religious tenets,
doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship;

(2) expenses for textbooks, including books and other instructional materials and
equipment purchased or leased for use in elementary and secondary schools in teaching
only those subjects legally and commonly taught in public elementary and secondary schools
in this state. "Textbooks" does not include instructional books and materials used in the
teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
tenets, doctrines, or worship, nor does it include books or materials for extracurricular
activities including sporting events, musical or dramatic events, speech activities, driver's
education, or similar programs;

(3) a maximum expense of deleted text begin$200deleted text endnew text begin $300new text end per family for new text beginexpenses listed in items (i) to (iii)
that are purchased for use in the taxpayer's home and not used in a trade or business regardless
of whether the computer is required by the dependent's school:
new text end

new text begin (i) new text endpersonal computer hardware, excluding single purpose processorsdeleted text begin, anddeleted text endnew text begin;
new text end

new text begin (ii)new text end educational software that assists a dependent to improve knowledge of core curriculum
areas or to expand knowledge and skills under the required academic standards under section
120B.021, subdivision 1, and the elective standard under section 120B.022, subdivision 1,
clause (2)deleted text begin, purchased for use in the taxpayer's home and not used in a trade or business
regardless of whether the computer is required by the dependent's school
deleted text end; and

new text begin (iii) monthly charges to an Internet service provider for Internet access; and
new text end

(4) the amount paid to others for transportation of a qualifying child attending an
elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
attendance laws, which is not operated for profit, and which adheres to the provisions of
the Civil Rights Act of 1964 and chapter 363A. Amounts under this clause exclude any
expense the taxpayer incurred in using the taxpayer's or the qualifying child's vehicle.

For purposes of this section, "qualifying child" has the meaning given in section 32(c)(3)
of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2019.
new text end

Sec. 2.

Minnesota Statutes 2020, section 290.0674, subdivision 2, is amended to read:


Subd. 2.

Limitations.

(a) For claimants with income not greater than deleted text begin$33,500deleted text endnew text begin $45,000new text end,
the maximum credit allowed for a family is $1,000 multiplied by the number of qualifying
children in kindergarten through grade 12 in the family. The maximum credit for families
with one qualifying child in kindergarten through grade 12 is reduced by $1 for each $4 of
household income over deleted text begin$33,500deleted text endnew text begin $45,000new text end, and the maximum credit for families with two or
more qualifying children in kindergarten through grade 12 is reduced by $2 for each $4 of
household income over deleted text begin$33,500deleted text endnew text begin $45,000new text end, but in no case is the credit less than zero.

(b) In the case of a married claimant, a credit is not allowed unless a joint income tax
return is filed.

(c) For a nonresident or part-year resident, the credit determined under subdivision 1
and the maximum credit amount in paragraph (a) must be allocated using the percentage
calculated in section 290.06, subdivision 2c, paragraph (e).

new text begin (d) The commissioner shall annually adjust the household income limitation in paragraph
(a) as provided in section 270C.22. The statutory year is 2020.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin The amendment to paragraph (a) is effective retroactively for
taxable years beginning after December 31, 2019. The amendment adding paragraph (d) is
effective for taxable years beginning after December 31, 2020.
new text end

Sec. 3. new text beginREFUNDS FOR TAX YEAR 2020.
new text end

new text begin The commissioner of revenue shall prescribe the form and manner in which a taxpayer
may claim a refund for education-related expenses allowed under sections 1 and 2 incurred
in taxable years beginning after December 31, 2019, and before January 1, 2021.
new text end