HF 1097

as introduced - 88th Legislature (2013 - 2014) Posted on 03/04/2013 01:47pm

A bill for an act
relating to taxation; income and franchise; providing a refundable credit for
payment of principal and interest on student loans; appropriating money;
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 [290.0682] EDUCATION OPPORTUNITY CREDIT.
new text end

new text begin Subdivision 1. 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.
new text end

new text begin (b) "Eligible individual" means an individual who is a Minnesota resident who
graduated from a postsecondary educational institution located in Minnesota.
new text end

new text begin (c) "Eligible employer" means an employer of an eligible individual who undertakes
partial or full payment of the eligible individual's qualified education loan.
new text end

new text begin (d) "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 taxpayer or
taxpayer's spouse.
new text end

new text begin (e) "Postsecondary educational institution" means a two- or four-year postsecondary
educational institution that meets the definition of "eligible education institution" provided
in section 221(d)(2)(B) of the Internal Revenue Code, but does not include a private,
for-profit, postsecondary educational institution.
new text end

new text begin (f) "Income" has the meaning given in section 290.067, subdivision 2a.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) An eligible individual or an eligible employer is
allowed a credit against the tax due under this chapter.
new text end

new text begin (b) The credit amount for an eligible individual equals the amount the individual
paid during the taxable year to pay principal and interest on qualified education loans, not
to exceed $4,000.
new text end

new text begin (c) The credit amount for an eligible employer equals the amount the employer paid
during the taxable year to pay principal and interest on qualified education loans of an
eligible individual, not to exceed $4,000. An eligible employer may only claim the credit
based on qualified education loan payments made on behalf of the eligible individual in
months in which the eligible individual did not make payments.
new text end

new text begin Subd. 3. new text end

new text begin Limitations. new text end

new text begin (a) For an eligible individual taxpayer filing single, or
married filing separately, the amount of credit allowed under this section is reduced by $1
for every $9 that the eligible individual's household income exceeds $39,000.
new text end

new text begin (b) For all other eligible individual taxpayers, the amount of credit under this section
is reduced by $1 for every $9 that the eligible individual's household income exceeds
$58,500.
new text end

new text begin (c) There is no limit to the number of credits that an eligible employer may claim
under subdivision 2, paragraph (c).
new text end

new text begin Subd. 4. new text end

new text begin Credit refundable. new text end

new text begin (a) If the amount of credit which an eligible individual
taxpayer is eligible to receive under this section exceeds the taxpayer's tax liability under
this chapter, the commissioner shall refund the excess to the taxpayer.
new text end

new text begin (b) The credit under this section for eligible employers is not refundable.
new text end

new text begin Subd. 5. new text end

new text begin Appropriation. new text end

new text begin 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, 2012.
new text end