1.1                          A bill for an act
  1.2             relating to income taxes; allowing a credit for 
  1.3             children; appropriating money; proposing coding for 
  1.4             new law in Minnesota Statutes, chapter 290. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [290.0675] [CREDIT FOR CHILDREN.] 
  1.7      Subdivision 1.  [CREDIT ALLOWED.] (a) A taxpayer is allowed 
  1.8   a credit against the tax imposed by this chapter equal to the 
  1.9   sum of (1) $2,000 for each child who has not attained the age of 
  1.10  three; and (2) $1,000 for each child who has attained the age of 
  1.11  three but has not attained the age of five. 
  1.12     (b) The total credit allowed a taxpayer is reduced by $50 
  1.13  for each $1,000 of income, or fraction thereof, over a threshold 
  1.14  amount, but in no case is the credit less than zero.  The 
  1.15  threshold amounts are $110,000 for married taxpayers filing 
  1.16  joint returns, $55,000 for married taxpayers filing separate 
  1.17  returns, and $75,000 for all other taxpayers. 
  1.18     (c) For purposes of this section, "income" means adjusted 
  1.19  gross income as defined in section 62 of the Internal Revenue 
  1.20  Code, and "child" means a child or stepchild who qualifies as a 
  1.21  dependent of the taxpayer under section 152 of the Internal 
  1.22  Revenue Code. 
  1.23     (d) For nonresidents and part-year residents, the credit 
  1.24  must be allocated based on the percentage calculated under 
  1.25  section 290.06, subdivision 2c, paragraph (e). 
  2.1      Subd. 2.  [CREDIT REFUNDABLE.] If the amount of credit 
  2.2   which the claimant is eligible to receive under this section 
  2.3   exceeds the claimant's tax liability under this chapter, the 
  2.4   commissioner shall refund the excess to the claimant. 
  2.5      Subd. 3.  [APPROPRIATION.] An amount sufficient to pay the 
  2.6   refunds required by this section is appropriated to the 
  2.7   commissioner from the general fund. 
  2.8      Sec. 2.  [EFFECTIVE DATE.] 
  2.9      Section 1 is effective for taxable years beginning after 
  2.10  December 31, 1998.