1.1 A bill for an act
1.2 relating to taxation; individual income; establishing an advance payment of the
1.3 education credit and disallowing education credit assignments; requiring a report
1.4 on delivering advance payments using an electronic benefits transfer card; amending
1.5 Minnesota Statutes 2024, section 290.0674, by adding a subdivision; repealing
1.6 Minnesota Statutes 2024, section 290.0679.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2024, section 290.0674, is amended by adding a subdivision
1.9to read:
1.10 Subd. 7.Advance payments.(a) A taxpayer may elect to receive an advance payment
1.11of the education credit under this section. The amount of the advance payment equals half
1.12the amount of the credit the taxpayer received under this section in the taxable year ending
1.13in the previous calendar year.
1.14 (b) A taxpayer with a qualifying child who did not receive a tax credit in the taxable
1.15year ending in the previous calendar year may elect to receive an advance payment of up
1.16to $750 for each child of the taxpayer that will be a qualifying child in the taxable year, but
1.17the taxpayer must certify to the commissioner that the taxpayer is aware that the advance
1.18payment may increase the taxpayer's liability for tax if the taxpayer has insufficient
1.19education-related expenses in the taxable year.
1.20 (c) To be eligible for an advance payment under this subdivision, a taxpayer's adjusted
1.21gross income must have been less than the applicable phaseout threshold for the child credit
1.22under section 290.0661, subdivision 4, in the taxable year ending in the previous calendar
1.23year.
1Section 1.
REVISOR EAP/EN 25-0254301/31/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 779
NINETY-FOURTH SESSION
Authored by Kresha02/13/2025
The bill was read for the first time and referred to the Committee on Education Finance 2.1 (d) To receive an advance payment under this section, a taxpayer must apply to the
2.2commissioner in the manner specified by the commissioner no later than September 1 of
2.3the calendar year in which the taxpayer applied. The commissioner must not make an
2.4advance payment to an eligible taxpayer prior to July 1 of the calendar year in which the
2.5taxpayer applied, or after September 15 of the calendar year in which the taxpayer applied.
2.6 (e) The amount of a taxpayer's credit under this section for the taxable year is reduced
2.7by the amount of advance payments received by the taxpayer in the calendar year during
2.8which the taxable year began. If a taxpayer's advance payments exceeded the credit the
2.9taxpayer was eligible to receive for the taxable year, the taxpayer's liability for tax is increased
2.10by the difference between the amount of advance payments received and the credit amount.
2.11 EFFECTIVE DATE.This section is effective for advance payments after December
2.1231, 2025.
2.13 Sec. 2. REPORT ON EDUCATION CREDIT PAYMENTS USING AN
2.14ELECTRONIC BENEFITS CARD.
2.15 (a) No later than January 15, 2027, the commissioner of revenue must submit a report
2.16to the legislative committees with jurisdiction over taxation on the feasibility of making
2.17advance payments under Minnesota Statutes, section 290.0674, subdivision 7, using an
2.18electronic benefits transfer card.
2.19 (b) The report must comply with Minnesota Statutes, sections 3.195 and 3.197, and:
2.20 (1) evaluate the feasibility of establishing an electronic benefits transfer card for education
2.21expenses;
2.22 (2) estimate the possible cost of establishing an electronic benefits transfer card and a
2.23payment processing network; and
2.24 (3) describe the advantages and disadvantages of delivering advance payments of the
2.25education credit using an electronic benefits transfer card.
2.26 Sec. 3. REPEALER.
2.27 Minnesota Statutes 2024, section 290.0679, is repealed.
2.28 EFFECTIVE DATE.This section is effective for assignments after December 31, 2025.
2Sec. 3.
REVISOR EAP/EN 25-0254301/31/25 290.0679 ASSIGNMENT OF REFUND.
Subdivision 1.Definitions.(a) "Qualifying taxpayer" means a resident who has a child in
kindergarten through grade 12 in the current tax year and who met the income requirements under
section 290.0674, subdivision 2, for receiving the education credit in the tax year preceding the
assignment of the taxpayer's refund.
(b) "Education credit" means the credit allowed under section 290.0674.
(c) "Refund" means an individual income tax refund.
(d) "Financial institution" means a state or federally chartered bank, savings bank, savings
association, or credit union.
(e) "Qualifying organization" means a tax-exempt organization under section 501(c)(3) of the
Internal Revenue Code.
(f) "Assignee" means a financial institution or qualifying organization that is entitled to receive
payment of a refund assigned under this section.
Subd. 2.Conditions for assignment.A qualifying taxpayer may assign all or part of an
anticipated refund for the current and future taxable years to a financial institution or a qualifying
organization. A financial institution or qualifying organization accepting assignment must pay the
amount secured by the assignment to a third-party vendor. The commissioner of education shall,
upon request from a third-party vendor, certify that the vendor's products and services qualify for
the education credit. A denial of a certification may be appealed to the commissioner pursuant to
this subdivision and notwithstanding chapter 14. A financial institution or qualifying organization
that accepts assignments under this section must verify as part of the assignment documentation
that the product or service to be provided by the third-party vendor has been certified by the
commissioner of education as qualifying for the education credit. The amount assigned for the
current and future taxable years may not exceed the maximum allowable education credit for the
current taxable year. Both the taxpayer and spouse must consent to the assignment of a refund from
a joint return.
Subd. 3.Consent for disclosure.When the taxpayer applies to the financial institution or the
qualifying organization for a loan to be secured by the assignment under subdivision 2, the taxpayer
must sign a written consent on a form prescribed by the commissioner. The consent must authorize
the commissioner to disclose to the financial institution or qualifying organization the total amount
of state taxes owed or revenue recapture claims filed under chapter 270A against the taxpayer, and
the total amount of outstanding assignments made by the taxpayer under this section. For a refund
from a joint return, the consent must also authorize the disclosure of taxes, revenue recapture claims,
and assignments relating to the taxpayer's spouse, and must be signed by the spouse. The financial
institution or qualifying organization may request that the taxpayer provide a copy of the taxpayer's
previous year's income tax return, if any, and may assist the taxpayer in requesting a copy of the
previous year's return from the commissioner.
Subd. 4.Consumer disclosure.(a) A third-party vendor that receives payment of the amount
secured by an assignment must comply with the requirements of this subdivision.
(b) The third-party vendor must disclose to the taxpayer, in plain language:
(1) the cost of each product or service for which the third-party vendor separately charges the
taxpayer;
(2) any fees charged to the taxpayer for tax preparation services; and
(3) for qualifying low-income taxpayers, information on the availability of free tax preparation
services.
(c) The third-party vendor must provide to the taxpayer executed copies of any documents
signed by the taxpayer.
Subd. 5.Filing of assignment.The commissioner shall prescribe the form of and manner for
filing an assignment of a refund under this section.
Subd. 6.Effect of assignment.The taxpayer may not revoke an assignment after it has been
filed. The assignee must notify the commissioner if the loan secured by the assignment has been
paid in full, in which case the assignment is canceled. An assignment is in effect until the amount
assigned is refunded in full to the assignee, or until the assignee cancels the assignment.
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APPENDIX
Repealed Minnesota Statutes: 25-02543 Subd. 7.Payment of refund.When a refund assigned under this section is issued by the
commissioner, the proceeds of the refund, as defined in subdivision 1, paragraph (c), must be
distributed in the following order:
(1) to satisfy any delinquent tax obligations of the taxpayer which are owed to the commissioner;
(2) to claimant agencies to satisfy any revenue recapture claims filed against the taxpayer, in
the order of priority of the claims set forth in section 270A.10;
(3) to assignees to satisfy assignments under this section, based on the order in time in which
the commissioner received the assignments; and
(4) to the taxpayer.
Subd. 8.Legal action.If there is a dispute between the taxpayer and the assignee after the
commissioner has remitted the taxpayer's refund to the assignee, the taxpayer's only remedy is to
bring an action against the assignee in court to recover the refund. The action must be brought
within two years after the commissioner remits the refund to the assignee. The commissioner may
not be a party to the proceeding.
Subd. 9.Assignments private data.Information regarding assignments under this section is
classified as private data on individuals.
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APPENDIX
Repealed Minnesota Statutes: 25-02543