2000 Minnesota Statutes

     290.0671 Minnesota working family credit. 

    Subdivision 1.    Credit allowed.  (a) An individual is 
 allowed a credit against the tax imposed by this chapter equal 
 to a percentage of earned income.  To receive a credit, a 
 taxpayer must be eligible for a credit under section 32 of the 
 Internal Revenue Code.  

    (b) For individuals with no qualifying children, the credit 
 equals 1.9125 percent of the first $4,460 of earned income.  The 
 credit is reduced by 1.9125 percent of earned income or modified 
 adjusted gross income, whichever is greater, in excess of 
 $5,570, but in no case is the credit less than zero. 

    (c) For individuals with one qualifying child, the credit 
 equals 8.5 percent of the first $6,680 of earned income and 8.5 
 percent of earned income over $11,650 but less than $12,990. The 
 credit is reduced by 5.73 percent of earned income or modified 
 adjusted gross income, whichever is greater, in excess of 
 $14,560, but in no case is the credit less than zero. 

    (d) For individuals with two or more qualifying children, 
 the credit equals ten percent of the first $9,390 of earned 
 income and 20 percent of earned income over $14,350 but less 
 than $16,230.  The credit is reduced by 10.3 percent of earned 
 income or modified adjusted gross income, whichever is greater, 
 in excess of $17,280, but in no case is the credit less than 
 zero. 

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

    (f) For a person who was a resident for the entire tax year 
 and has earned income not subject to tax under this chapter, the 
 credit must be allocated based on the ratio of federal adjusted 
 gross income reduced by the earned income not subject to tax 
 under this chapter over federal adjusted gross income. 

    (g) The commissioner shall construct tables showing the 
 amount of the credit at various income levels and make them 
 available to taxpayers.  The tables shall follow the schedule 
 contained in this subdivision, except that the commissioner may 
 graduate the transition between income brackets. 

    Subd. 1a.    Definitions.  For purposes of this section, 
 the terms "qualifying child," "earned income," and "modified 
 adjusted gross income" have the meanings given in section 32(c) 
 of the Internal Revenue Code. 

    Subd. 2.    Credit name.  The credit allowed by this 
 section shall be known as the "Minnesota working family credit." 

    Subd. 3.    Reduction by alternative minimum tax 
 liability.  The amount of the credit allowed must be reduced 
 by the amount of the taxpayer's liability under section 290.091, 
 determined before the credit allowed by this section is 
 subtracted from regular tax liability. 

    Subd. 4.    Credit refundable.  If the amount of credit 
 which the 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. 

    Subd. 5.    Calculation assistance.  Upon request of the 
 individual and submission of the necessary information, in the 
 form prescribed by the commissioner, the department of revenue 
 shall calculate the credit on behalf of the individual. 

    Subd. 6.    Appropriation.  An amount sufficient to pay 
 the refunds required by this section is appropriated to the 
 commissioner from the general fund.  This amount includes any 
 amounts appropriated to the commissioner of human services from 
 the federal Temporary Assistance for Needy Families (TANF) block 
 grant funds for transfer to the commissioner of revenue. 

    Subd. 6a.    TANF appropriation for working family credit 
 expansion.  (a) On an annual basis the commissioner of 
 revenue, with the assistance of the commissioner of human 
 services, shall calculate the value of the refundable portion of 
 the Minnesota Working Family Credit provided under this section 
 that qualifies for payment with funds from the federal Temporary 
 Assistance for Needy Families (TANF) block grant.  Of this total 
 amount, the commissioner of revenue shall estimate the portion 
 entailed by the expansion of the credit rates for individuals 
 with qualifying children over the rates provided in Laws 1999, 
 chapter 243, article 2, section 12. 

    (b) An amount sufficient to pay the refunds entailed by the 
 expansion of the credit rates for individuals with qualifying 
 children over the rates provided in Laws 1999, chapter 243, 
 article 2, section 12, as estimated in paragraph (a), is 
 appropriated to the commissioner of human services from the 
 federal Temporary Assistance for Needy Families (TANF) block 
 grant funds, for transfer to the commissioner of revenue for 
 deposit in the general fund. 

    Subd. 7.    Inflation adjustment.  The earned income 
 amounts used to calculate the credit and the income thresholds 
 at which the maximum credit begins to be reduced in subdivision 
 1 must be adjusted for inflation.  The commissioner shall adjust 
 the earned income and threshold amounts by the percentage 
 determined under section 290.06, subdivision 2d, for the taxable 
 year. 

    HIST: 1991 c 291 art 6 s 27; 1992 c 511 art 6 s 19; art 7 s 
 14; 1993 c 375 art 8 s 9,14; 1994 c 587 art 1 s 24; 1Sp1997 c 4 
 art 13 s 2; 1998 c 389 art 6 s 7-9; 1999 c 243 art 2 s 12; 2000 
 c 490 art 4 s 17-19