Individual income tax provisions modified, and 18-year-old children allowed to qualify for Minnesota child credit.
Summary
House Bill HF4823 modifies provisions related to individual income tax in Minnesota by allowing 18-year-old children to qualify for the Minnesota child credit. The bill aims to align state tax regulations with the eligibility criteria that consider older children as part of a family unit for tax benefits. This change intends to expand the scope of financial assistance provided to families with dependents who are approaching adulthood, potentially impacting how families plan their finances as their children transition to independence.
The bill amends specific sections of the Minnesota Statutes 2023, particularly sections 290.0661 and 290.0671. It defines a 'qualifying child' as someone who meets the criteria outlined in federal tax laws while excluding certain provisions that specify other age limitations. This aims to ensure that families can claim tax credits even as their children turn 18, thereby supporting their continued financial support during this transitional phase of life.
One significant aspect of HF4823 is its effective date, which is set for taxable years beginning after December 31, 2023. This timeline provides taxpayers and state tax authorities adequate preparation time to adjust to the new regulations. The bill underscores a growing recognition of the financial challenges faced by families, particularly as children age out of many existing benefits at the stroke of their 18th birthday when they typically require support for education or vocational training.
Discussion surrounding HF4823 may include various opinions on expanding tax credits for older children, with proponents arguing that it recognizes the ongoing need for financial support during a crucial life transition. However, some may criticize the broader implications of changing tax structures or express concerns about the fiscal impact on state revenue. Overall, the bill reflects ongoing dialogues in state legislation about family support mechanisms and tax equity in addressing the changing needs of households.
Individual income tax; child credit marriage penalty eliminated and credit phaseout increased, and working family credit limited based on earned income to taxpayers with qualifying children.
Individual income tax provisions modified; and homeless youths, former foster youths, and individuals 65 and older allowed to receive working family credit.
Individual income and corporate franchise taxes, property taxes, local government aids, sales and use taxes, tax increment financing, special local taxes, and other various taxes and tax-related provisions modified; various tax refunds and credits modified; reports required; and money appropriated.
Income and property tax provisions modified, unlimited subtraction allowed for Social Security income, first and second tier income tax rates reduced by one percentage point, direct payments to taxpayers provided, valuation limit modified for property and homestead market value exclusion increased, and refundable child credit allowed.