SF 1669

as introduced - 90th Legislature (2017 - 2018) Posted on 03/03/2017 08:59am

A bill for an act
relating to taxation; individual income and corporate franchise; establishing a
refundable tax credit for certain qualified child care expenses and professionals;
proposing coding for new law in Minnesota Statutes, chapter 290.

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

Section 1.

new text begin [290.0693] SCHOOL READINESS TAX CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed for payments to a qualifying child care facility. new text end

new text begin (a) In
addition to the credit allowed under section 290.067, an individual taxpayer is allowed a
credit against the tax due under this chapter equal to a percentage of amounts paid to a child
care facility on behalf of a dependent child, subject to the limitations in paragraph (c).
new text end

new text begin (b) The credit under paragraph (a) equals:
new text end

new text begin (1) for a child care facility with a quality rating of four stars as of December 31 of the
calendar year in which the amounts are paid, 150 percent of amounts paid to a child care
facility on behalf of a dependent child;
new text end

new text begin (2) for a child care facility with a quality rating of three stars as of December 31 of the
calendar year in which the amounts are paid, 100 percent of amounts paid to a child care
facility on behalf of a dependent child;
new text end

new text begin (3) for a child care facility with a quality rating of two stars as of December 31 of the
calendar year in which the amounts are paid, 50 percent of amounts paid to a child care
facility on behalf of a dependent child; and
new text end

new text begin (4) for a child care facility with a quality rating of one star as of December 31 of the
calendar year in which the amounts are paid, 25 percent of amounts paid to a child care
facility on behalf of a dependent child.
new text end

new text begin (c) The credit allowed under paragraph (a) must not exceed $1,050 for payments made
on behalf of one child and must not exceed $2,100 for payments made on behalf of two or
more children.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed for business-supported provider services. new text end

new text begin (a) To the extent
not deducted as a business expense, an individual taxpayer or corporation is allowed a credit
against the tax due under this chapter equal to a percentage of eligible business child care
expenses to a child care facility, or for a child care facility to which the expenses are related.
new text end

new text begin (b) The credit under paragraph (a) equals:
new text end

new text begin (1) 15 percent of eligible business child care expenses to or for a child care facility with
a quality rating of four stars as of December 31 of the calendar year in which the amounts
are paid;
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new text begin (2) ten percent of eligible business child care expenses to or for a child care facility with
a quality rating of three stars as of December 31 of the calendar year in which the amounts
are paid;
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new text begin (3) five percent of eligible business child care expenses to or for a child care facility
with a quality rating of two stars as of December 31 of the calendar year in which the
amounts are paid; and
new text end

new text begin (4) ....... percent of eligible business child care expenses to or for a child care facility
with a quality rating of one star as of December 31 of the calendar year in which the amounts
are paid.
new text end

new text begin Subd. 3. new text end

new text begin Credit allowed for child care professionals. new text end

new text begin (a) An individual taxpayer who
qualifies as a child care professional is allowed a credit against the tax due in this chapter,
subject to the limitations in paragraph (b). An individual claiming the credit under this
subdivision may only claim a credit for employment at one child care facility for the taxable
year.
new text end

new text begin (b) The credit under paragraph (a) equals:
new text end

new text begin (1) $....... for a child care professional with a career lattice step level of six or seven as
of December 31 of the taxable year in which the credit is claimed;
new text end

new text begin (2) $....... for a child care professional with a career lattice step level of eight or nine as
of December 31 of the taxable year in which the credit is claimed; and
new text end

new text begin (3) $....... for a child care professional with a career lattice step level of ten as of December
31 of the taxable year in which the credit is claimed.
new text end

new text begin Subd. 4. new text end

new text begin Credit allowed for contributions to REETAIN. new text end

new text begin To the extent not deducted
as a business expense or charitable contribution for either federal or Minnesota income tax
purposes, an individual taxpayer or corporation is allowed a credit against the tax due under
this chapter equal to ….... percent of the amount contributed to the REETAIN program, up
to $........
new text end

new text begin Subd. 5. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the
meanings given them.
new text end

new text begin (b) "Career lattice step" means the qualification level assigned to develop Minnesota's
professional development registry for child care professionals.
new text end

new text begin (c) "Child" or "children" means individuals up to and including five years of age.
new text end

new text begin (d) "Child care facility" means any entity with a quality rating of at least one star during
the calendar year for which the credit under this section is claimed.
new text end

new text begin (e) "Child care professional" means an individual who has:
new text end

new text begin (1) obtained a career lattice step level of six or greater on the Develop MN childhood
workforce professional registry; and
new text end

new text begin (2) been employed at a child care facility for ....... months of the taxable year in which
the credit is claimed.
new text end

new text begin (f) "Eligible business child care expenses" means the total of the following expenses,
for the year in which the expenses are incurred:
new text end

new text begin (1) payments for the construction, renovation, expansion, or major repair of a child care
facility, the purchase of equipment for a child care facility, or the maintenance and operation
of a child care facility, not to exceed $50,000;
new text end

new text begin (2) payments made to a child care facility on behalf of the taxpayer's employees, not to
exceed $5,000 per child; and
new text end

new text begin (3) payments for the purchase of child care slots at child care facilities actually provided
or reserved for children of the taxpayer's employees, not to exceed $50,000.
new text end

new text begin (g) "Quality rating" means the rating awarded to a child care facility by the Department
of Human Services pursuant to section 124D.142.
new text end

new text begin (h) "REETAIN" means the retaining early educators through attaining incentives now
program administered under Child Care Aware of Minnesota.
new text end

new text begin Subd. 6. new text end

new text begin Required documentation. new text end

new text begin A taxpayer claiming a credit under this section must
provide documentation of eligibility for the credit in a form and manner prescribed by the
commissioner, in consultation with the commissioner of human services.
new text end

new text begin Subd. 7. new text end

new text begin Allocation for nonresidents and part-year residents. new text end

new text begin 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 end

new text begin Subd. 8. new text end

new text begin Credit refundable; carryforward provisions. new text end

new text begin (a) For individual taxpayers
with income, as defined under section 290.067, subdivision 2a, of $39,510 or less, if the
amount of total credits that the claimant is eligible to receive under this section exceeds the
claimant's tax liability under this chapter, the commissioner must refund the excess to the
claimant.
new text end

new text begin (b) For all other taxpayers claiming a credit under this section, if the amount of total
credits that the claimant is eligible to receive under this section exceeds the claimant's tax
liability under this chapter, the excess is a credit carryforward for up to five years. The entire
amount of the carryforward is carried over to the earliest tax year to which the carryforward
may be carried, and then to each succeeding year to which the carryforward may be carried.
new text end

new text begin Subd. 9. new text end

new text begin Partnerships; multiple owners. new text end

new text begin (a) Credits allowed under subdivision 2 to a
partnership, limited liability company taxed as a partnership, corporation, or multiple owners
of property are passed through to the partners, members, shareholders, or owners,
respectively, pro rata to each partner, member, shareholder, or owner based on that person's
share of the entity's income for the taxable year.
new text end

new text begin (b) For a corporation that is a partner in a partnership, the credit allowed for the taxable
year is limited to the lesser of the amount determined under subdivision 7, paragraph (b),
for the taxable year or an amount, separately computed with respect to the corporation's
interest in the trade, business, or entity, equal to the amount of tax attributable to that portion
of taxable income that is allocable or apportionable to the corporation's interest in the trade,
business, or entity.
new text end

new text begin Subd. 10. new text end

new text begin Inflation adjustment. new text end

new text begin The commissioner shall adjust the $39,510 in
subdivision 8 by the percentage determined pursuant to the provisions of section 1(f) of the
Internal Revenue Code, except that in section 1(f)(3)(B) the word "2014" shall be substituted
for the word "1992." For 2018, the commissioner shall then determine the percentage change
from the 12 months ending on August 31, 2016, to the 12 months ending on August 31,
2017, and in each subsequent year, from the 12 months ending on August 31, 2014, to the
12 months ending on August 31 of the year preceding the taxable year. The determination
of the commissioner pursuant to this subdivision shall not be considered a "rule" and shall
not be subject to the Administrative Procedure Act contained in chapter 14.
new text end

new text begin Subd. 11. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds authorized under
this section is appropriated to the commissioner of revenue 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, 2016.
new text end