Minnesota 2025-2026 Regular Session

Minnesota House Bill HF779 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; establishing an advance payment of the
3	3	1.3 education credit and disallowing education credit assignments; requiring a report
4	4	1.4 on delivering advance payments using an electronic benefits transfer card; amending
5	5	1.5 Minnesota Statutes 2024, section 290.0674, by adding a subdivision; repealing
6	6	1.6 Minnesota Statutes 2024, section 290.0679.
7	7	1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
8	8	1.8 Section 1. Minnesota Statutes 2024, section 290.0674, is amended by adding a subdivision
9	9	1.9to read:
10	10	1.10 Subd. 7.Advance payments.(a) A taxpayer may elect to receive an advance payment
11	11	1.11of the education credit under this section. The amount of the advance payment equals half
12	12	1.12the amount of the credit the taxpayer received under this section in the taxable year ending
13	13	1.13in the previous calendar year.
14	14	1.14 (b) A taxpayer with a qualifying child who did not receive a tax credit in the taxable
15	15	1.15year ending in the previous calendar year may elect to receive an advance payment of up
16	16	1.16to $750 for each child of the taxpayer that will be a qualifying child in the taxable year, but
17	17	1.17the taxpayer must certify to the commissioner that the taxpayer is aware that the advance
18	18	1.18payment may increase the taxpayer's liability for tax if the taxpayer has insufficient
19	19	1.19education-related expenses in the taxable year.
20	20	1.20 (c) To be eligible for an advance payment under this subdivision, a taxpayer's adjusted
21	21	1.21gross income must have been less than the applicable phaseout threshold for the child credit
22	22	1.22under section 290.0661, subdivision 4, in the taxable year ending in the previous calendar
23	23	1.23year.
24	24	1Section 1.
25	25	REVISOR EAP/EN 25-0254301/31/25
26	26	State of Minnesota
27	27	This Document can be made available
28	28	in alternative formats upon request
29	29	HOUSE OF REPRESENTATIVES
30	30	H. F. No. 779
31	31	NINETY-FOURTH SESSION
32	32	Authored by Kresha02/13/2025
33	33	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
34	34	2.2commissioner in the manner specified by the commissioner no later than September 1 of
35	35	2.3the calendar year in which the taxpayer applied. The commissioner must not make an
36	36	2.4advance payment to an eligible taxpayer prior to July 1 of the calendar year in which the
37	37	2.5taxpayer applied, or after September 15 of the calendar year in which the taxpayer applied.
38	38	2.6 (e) The amount of a taxpayer's credit under this section for the taxable year is reduced
39	39	2.7by the amount of advance payments received by the taxpayer in the calendar year during
40	40	2.8which the taxable year began. If a taxpayer's advance payments exceeded the credit the
41	41	2.9taxpayer was eligible to receive for the taxable year, the taxpayer's liability for tax is increased
42	42	2.10by the difference between the amount of advance payments received and the credit amount.
43	43	2.11 EFFECTIVE DATE.This section is effective for advance payments after December
44	44	2.1231, 2025.
45	45	2.13 Sec. 2. REPORT ON EDUCATION CREDIT PAYMENTS USING AN
46	46	2.14ELECTRONIC BENEFITS CARD.
47	47	2.15 (a) No later than January 15, 2027, the commissioner of revenue must submit a report
48	48	2.16to the legislative committees with jurisdiction over taxation on the feasibility of making
49	49	2.17advance payments under Minnesota Statutes, section 290.0674, subdivision 7, using an
50	50	2.18electronic benefits transfer card.
51	51	2.19 (b) The report must comply with Minnesota Statutes, sections 3.195 and 3.197, and:
52	52	2.20 (1) evaluate the feasibility of establishing an electronic benefits transfer card for education
53	53	2.21expenses;
54	54	2.22 (2) estimate the possible cost of establishing an electronic benefits transfer card and a
55	55	2.23payment processing network; and
56	56	2.24 (3) describe the advantages and disadvantages of delivering advance payments of the
57	57	2.25education credit using an electronic benefits transfer card.
58	58	2.26 Sec. 3. REPEALER.
59	59	2.27 Minnesota Statutes 2024, section 290.0679, is repealed.
60	60	2.28 EFFECTIVE DATE.This section is effective for assignments after December 31, 2025.
61	61	2Sec. 3.
62	62	REVISOR EAP/EN 25-0254301/31/25 290.0679 ASSIGNMENT OF REFUND.
63	63	Subdivision 1.Definitions.(a) "Qualifying taxpayer" means a resident who has a child in
64	64	kindergarten through grade 12 in the current tax year and who met the income requirements under
65	65	section 290.0674, subdivision 2, for receiving the education credit in the tax year preceding the
66	66	assignment of the taxpayer's refund.
67	67	(b) "Education credit" means the credit allowed under section 290.0674.
68	68	(c) "Refund" means an individual income tax refund.
69	69	(d) "Financial institution" means a state or federally chartered bank, savings bank, savings
70	70	association, or credit union.
71	71	(e) "Qualifying organization" means a tax-exempt organization under section 501(c)(3) of the
72	72	Internal Revenue Code.
73	73	(f) "Assignee" means a financial institution or qualifying organization that is entitled to receive
74	74	payment of a refund assigned under this section.
75	75	Subd. 2.Conditions for assignment.A qualifying taxpayer may assign all or part of an
76	76	anticipated refund for the current and future taxable years to a financial institution or a qualifying
77	77	organization. A financial institution or qualifying organization accepting assignment must pay the
78	78	amount secured by the assignment to a third-party vendor. The commissioner of education shall,
79	79	upon request from a third-party vendor, certify that the vendor's products and services qualify for
80	80	the education credit. A denial of a certification may be appealed to the commissioner pursuant to
81	81	this subdivision and notwithstanding chapter 14. A financial institution or qualifying organization
82	82	that accepts assignments under this section must verify as part of the assignment documentation
83	83	that the product or service to be provided by the third-party vendor has been certified by the
84	84	commissioner of education as qualifying for the education credit. The amount assigned for the
85	85	current and future taxable years may not exceed the maximum allowable education credit for the
86	86	current taxable year. Both the taxpayer and spouse must consent to the assignment of a refund from
87	87	a joint return.
88	88	Subd. 3.Consent for disclosure.When the taxpayer applies to the financial institution or the
89	89	qualifying organization for a loan to be secured by the assignment under subdivision 2, the taxpayer
90	90	must sign a written consent on a form prescribed by the commissioner. The consent must authorize
91	91	the commissioner to disclose to the financial institution or qualifying organization the total amount
92	92	of state taxes owed or revenue recapture claims filed under chapter 270A against the taxpayer, and
93	93	the total amount of outstanding assignments made by the taxpayer under this section. For a refund
94	94	from a joint return, the consent must also authorize the disclosure of taxes, revenue recapture claims,
95	95	and assignments relating to the taxpayer's spouse, and must be signed by the spouse. The financial
96	96	institution or qualifying organization may request that the taxpayer provide a copy of the taxpayer's
97	97	previous year's income tax return, if any, and may assist the taxpayer in requesting a copy of the
98	98	previous year's return from the commissioner.
99	99	Subd. 4.Consumer disclosure.(a) A third-party vendor that receives payment of the amount
100	100	secured by an assignment must comply with the requirements of this subdivision.
101	101	(b) The third-party vendor must disclose to the taxpayer, in plain language:
102	102	(1) the cost of each product or service for which the third-party vendor separately charges the
103	103	taxpayer;
104	104	(2) any fees charged to the taxpayer for tax preparation services; and
105	105	(3) for qualifying low-income taxpayers, information on the availability of free tax preparation
106	106	services.
107	107	(c) The third-party vendor must provide to the taxpayer executed copies of any documents
108	108	signed by the taxpayer.
109	109	Subd. 5.Filing of assignment.The commissioner shall prescribe the form of and manner for
110	110	filing an assignment of a refund under this section.
111	111	Subd. 6.Effect of assignment.The taxpayer may not revoke an assignment after it has been
112	112	filed. The assignee must notify the commissioner if the loan secured by the assignment has been
113	113	paid in full, in which case the assignment is canceled. An assignment is in effect until the amount
114	114	assigned is refunded in full to the assignee, or until the assignee cancels the assignment.
115	115	1R
116	116	APPENDIX
117	117	Repealed Minnesota Statutes: 25-02543 Subd. 7.Payment of refund.When a refund assigned under this section is issued by the
118	118	commissioner, the proceeds of the refund, as defined in subdivision 1, paragraph (c), must be
119	119	distributed in the following order:
120	120	(1) to satisfy any delinquent tax obligations of the taxpayer which are owed to the commissioner;
121	121	(2) to claimant agencies to satisfy any revenue recapture claims filed against the taxpayer, in
122	122	the order of priority of the claims set forth in section 270A.10;
123	123	(3) to assignees to satisfy assignments under this section, based on the order in time in which
124	124	the commissioner received the assignments; and
125	125	(4) to the taxpayer.
126	126	Subd. 8.Legal action.If there is a dispute between the taxpayer and the assignee after the
127	127	commissioner has remitted the taxpayer's refund to the assignee, the taxpayer's only remedy is to
128	128	bring an action against the assignee in court to recover the refund. The action must be brought
129	129	within two years after the commissioner remits the refund to the assignee. The commissioner may
130	130	not be a party to the proceeding.
131	131	Subd. 9.Assignments private data.Information regarding assignments under this section is
132	132	classified as private data on individuals.
133	133	2R
134	134	APPENDIX
135	135	Repealed Minnesota Statutes: 25-02543