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