Bill > HF310

This bill expands Minnesota's dependent care income tax credit by making several key changes. First, it increases the maximum eligible dependent care expenses to $12,000 for one qualifying individual and $24,000 for two or more qualifying individuals. The bill introduces a new credit percentage of 50%, which is gradually reduced as a taxpayer's adjusted gross income exceeds $150,000, with a proportionally lower threshold for married couples filing separate returns. The legislation also clarifies definitions of employment-related expenses and qualifying individuals, explicitly noting that Minnesota family investment program grants should not disqualify a child as a dependent. Additionally, the bill provides special provisions for deemed expenses, such as when a child under one year old is cared for and the parents do not participate in a dependent care assistance program. The credit remains refundable, meaning that if the credit amount exceeds the taxpayer's tax liability, the excess will be refunded. These changes are designed to provide more substantial tax relief for families with dependent care expenses, with the new provisions set to take effect for taxable years beginning after December 31, 2024.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF0310&ssn=0&y=2025