Minnesota 2025-2026 Regular Session

Minnesota House Bill HF2197 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to taxation; individual income; eliminating the child credit marriage penalty
3	3	1.3 and increasing the phaseout; limiting the working family credit based on earned
4	4	1.4 income to taxpayers with qualifying children; amending Minnesota Statutes 2024,
5	5	1.5 sections 290.0661, subdivisions 4, 7; 290.0671, subdivisions 1, 7.
6	6	1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
7	7	1.7 Section 1. Minnesota Statutes 2024, section 290.0661, subdivision 4, is amended to read:
8	8	1.8 Subd. 4.Phaseout.The credits under subdivision 2 and section 290.0671 are phased
9	9	1.9down jointly. The combined amount of the credits is reduced by 12 percent of earned income
10	10	1.10or adjusted gross income, whichever is greater, in excess of the phaseout threshold. The
11	11	1.11phaseout threshold equals:
12	12	1.12 (1) $35,000 $75,000 for a married taxpayer filing a joint return; or
13	13	1.13 (2) $29,500 $37,500 for all other filers.
14	14	1.14 EFFECTIVE DATE.This section is effective for taxable years beginning after December
15	15	1.1531, 2024.
16	16	1.16 Sec. 2. Minnesota Statutes 2024, section 290.0661, subdivision 7, is amended to read:
17	17	1.17 Subd. 7.Inflation adjustment.(a) For taxable years beginning after December 31,
18	18	1.182025, The commissioner of revenue must annually adjust for inflation the credit amount in
19	19	1.19subdivision 3 as provided in section 270C.22. The adjusted amounts must be rounded to
20	20	1.20the nearest $60. The statutory year is taxable year 2025.
21	21	1Sec. 2.
22	22	REVISOR EAP/AC 25-0474303/06/25
23	23	State of Minnesota
24	24	This Document can be made available
25	25	in alternative formats upon request
26	26	HOUSE OF REPRESENTATIVES
27	27	H. F. No. 2197
28	28	NINETY-FOURTH SESSION
29	29	Authored by Robbins, Davids, Altendorf, Scott, Zeleznikar and others03/12/2025
30	30	The bill was read for the first time and referred to the Committee on Taxes 2.1 (b) For taxable years beginning after December 31, 2023, The commissioner of revenue
31	31	2.2must annually adjust for inflation the phaseout thresholds in subdivision 4, as provided in
32	32	2.3section 270C.22. The statutory year is taxable year 2023 2025.
33	33	2.4 EFFECTIVE DATE.This section is effective for taxable years beginning after December
34	34	2.531, 2025.
35	35	2.6 Sec. 3. Minnesota Statutes 2024, section 290.0671, subdivision 1, is amended to read:
36	36	2.7 Subdivision 1.Credit allowed.(a) An individual who is a resident of Minnesota is
37	37	2.8allowed a credit against the tax imposed by this chapter equal to a percentage of earned
38	38	2.9income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the
39	39	2.10Internal Revenue Code, except that:
40	40	2.11 (1) a taxpayer with no qualifying children who has attained the age of 19, but not attained
41	41	2.12age 65 before the close of the taxable year and is otherwise eligible for a credit under section
42	42	2.1332 of the Internal Revenue Code may also receive a credit;
43	43	2.14 (2) a taxpayer who is otherwise eligible for a credit under section 32 of the Internal
44	44	2.15Revenue Code remains eligible for the credit even if the taxpayer's earned income or adjusted
45	45	2.16gross income exceeds the income limitation under section 32 of the Internal Revenue Code;
46	46	2.17and
47	47	2.18 (3) section 32(m) of the Internal Revenue Code does not apply.
48	48	2.19 (b) A taxpayer's working family credit equals four percent of the first $8,750 $9,480 of
49	49	2.20earned income.
50	50	2.21 (c) The credit under this section is increased by:
51	51	2.22 (1) $925 $1,000 for a taxpayer with one qualifying older child;
52	52	2.23 (2) $2,100 $2,270 for a taxpayer with two qualifying older children; or
53	53	2.24 (3) $2,500 $2,710 for a taxpayer with three or more qualifying older children.
54	54	2.25 (d) The credit under this section is phased out jointly with the credit under section
55	55	2.26290.0661, subdivision 4. For a taxpayer with one or more qualifying older children who
56	56	2.27did not qualify for the credit under section 290.0661, the phaseout rate equals nine percent.
57	57	2.28 (e) For a person who was a resident for the entire tax year and has earned income not
58	58	2.29subject to tax under this chapter, the credit must be allocated based on the ratio of federal
59	59	2.30adjusted gross income reduced by the earned income not subject to tax under this chapter
60	60	2Sec. 3.
61	61	REVISOR EAP/AC 25-0474303/06/25 3.1over federal adjusted gross income. For purposes of this paragraph, the following clauses
62	62	3.2are not considered "earned income not subject to tax under this chapter":
63	63	3.3 (1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;
64	64	3.4 (2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and
65	65	3.5 (3) income derived from an Indian reservation by an enrolled member of the reservation
66	66	3.6while living on the reservation.
67	67	3.7 (f) The credit based on earned income under paragraph (b) is limited to taxpayers with:
68	68	3.8 (1) a qualifying older child; or
69	69	3.9 (2) a qualifying child, as defined in section 290.0661, subdivision 1.
70	70	3.10 EFFECTIVE DATE.This section is effective for taxable years beginning after December
71	71	3.1131, 2024.
72	72	3.12 Sec. 4. Minnesota Statutes 2024, section 290.0671, subdivision 7, is amended to read:
73	73	3.13 Subd. 7.Inflation adjustment.The commissioner shall annually adjust the earned
74	74	3.14income amounts used to calculate the credit and the qualifying older child amounts in
75	75	3.15subdivision 1 as provided in section 270C.22. The statutory year is taxable year 2023 2025.
76	76	3.16 EFFECTIVE DATE.This section is effective for taxable years beginning after December
77	77	3.1731, 2025.
78	78	3Sec. 4.
79	79	REVISOR EAP/AC 25-0474303/06/25