| 1 | 1 | | 1.1 A bill for an act |
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| 2 | 2 | | 1.2 relating to taxation; individual income and corporate franchise; allowing a |
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| 3 | 3 | | 1.3 subtraction for employer-provided dependent care assistance; establishing a tax |
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| 4 | 4 | | 1.4 credit for employer-provided child care expenses; amending Minnesota Statutes |
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| 5 | 5 | | 1.5 2024, section 290.0132, by adding a subdivision; proposing coding for new law |
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| 6 | 6 | | 1.6 in Minnesota Statutes, chapter 290. |
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| 7 | 7 | | 1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
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| 8 | 8 | | 1.8 Section 1. Minnesota Statutes 2024, section 290.0132, is amended by adding a subdivision |
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| 9 | 9 | | 1.9to read: |
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| 10 | 10 | | 1.10 Subd. 36.Employer-provided dependent care assistance.(a) The amount of dependent |
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| 11 | 11 | | 1.11care assistance is a subtraction. The subtraction under this subdivision is limited to $10,000 |
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| 12 | 12 | | 1.12for a married taxpayer filing a joint return and $5,000 for all other filers. |
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| 13 | 13 | | 1.13 (b) For the purposes of this section, "dependent care assistance" has the meaning given |
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| 14 | 14 | | 1.14in section 129(e)(1) of the Internal Revenue Code, but is limited to amounts paid by an |
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| 15 | 15 | | 1.15employer to an employee in excess of the amount that is excluded from gross income under |
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| 16 | 16 | | 1.16section 129(a) of the Internal Revenue Code. |
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| 17 | 17 | | 1.17 EFFECTIVE DATE.This section is effective for taxable years beginning after December |
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| 18 | 18 | | 1.1831, 2024. |
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| 19 | 19 | | 1.19 Sec. 2. [290.0687] EMPLOYER-PROVIDED CHILD CARE CREDIT. |
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| 20 | 20 | | 1.20 Subdivision 1.Definition.(a) For the purposes of this section, the following term has |
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| 21 | 21 | | 1.21the meaning given. |
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| 22 | 22 | | 1.22 (b) "Employer" has the meaning given in section 290.92, subdivision 1, clause (4). |
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| 23 | 23 | | 1Sec. 2. |
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| 24 | 24 | | REVISOR EAP/VJ 25-0387802/19/25 |
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| 25 | 25 | | State of Minnesota |
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| 26 | 26 | | This Document can be made available |
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| 27 | 27 | | in alternative formats upon request |
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| 28 | 28 | | HOUSE OF REPRESENTATIVES |
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| 29 | 29 | | H. F. No. 1563 |
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| 30 | 30 | | NINETY-FOURTH SESSION 2.1 Subd. 2.Credit allowed.(a) An employer is allowed a credit against the taxes imposed |
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| 31 | 31 | | 2.2under this chapter equal to the amount of the credit claimed under section 45F of the Internal |
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| 32 | 32 | | 2.3Revenue Code, except the credit under this section is limited to credits claimed based on |
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| 33 | 33 | | 2.4qualified child care expenses or qualified child care resource and referral expenditures that |
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| 34 | 34 | | 2.5were paid or incurred in Minnesota. |
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| 35 | 35 | | 2.6 (b) For a taxpayer who claimed a credit under section 45F of the Internal Revenue Code |
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| 36 | 36 | | 2.7based partly on expenses paid or incurred outside of Minnesota, the credit under this section |
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| 37 | 37 | | 2.8equals the amount of the credit claimed federally that is attributable to expenses paid or |
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| 38 | 38 | | 2.9incurred in Minnesota. |
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| 39 | 39 | | 2.10 Subd. 3.Partnerships; multiple owners.Credits granted to a partnership, a limited |
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| 40 | 40 | | 2.11liability company taxed as a partnership, or S corporation are passed through to the partners, |
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| 41 | 41 | | 2.12members, or shareholders, respectively, pro rata to each partner, member, or shareholder |
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| 42 | 42 | | 2.13based on their share of the entity's assets or as specially allocated in their organizational |
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| 43 | 43 | | 2.14documents or any other executed agreement, as of the last day of the taxable year. |
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| 44 | 44 | | 2.15 Subd. 4.Carryover.The credit under this section may not exceed the taxpayer's liability |
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| 45 | 45 | | 2.16for tax under this chapter. If the amount of the credit under this section exceeds the taxpayer's |
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| 46 | 46 | | 2.17liability for tax under this chapter, the excess is a credit carryover to each of the five |
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| 47 | 47 | | 2.18succeeding taxable years. The entire amount of the excess unused credit for the taxable year |
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| 48 | 48 | | 2.19must be carried first to the earliest of the taxable years to which the credit may be carried |
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| 49 | 49 | | 2.20and then to each successive year to which the credit may be carried. The amount of the |
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| 50 | 50 | | 2.21unused credit that may be added under this subdivision may not exceed the taxpayer's |
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| 51 | 51 | | 2.22liability for tax, less any credit for the current taxable year. |
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| 52 | 52 | | 2.23 EFFECTIVE DATE.This section is effective for taxable years beginning after December |
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| 53 | 53 | | 2.2431, 2024. |
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| 54 | 54 | | 2Sec. 2. |
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| 55 | 55 | | REVISOR EAP/VJ 25-0387802/19/25 |
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