Bill > HF1563

This bill introduces two tax-related provisions to support employers and employees with dependent care expenses. First, it creates a new tax subtraction for employer-provided dependent care assistance, allowing taxpayers to subtract up to $10,000 for married couples filing jointly and $5,000 for other filers from their state income taxes. This subtraction applies specifically to dependent care assistance amounts paid by employers that exceed the current federal gross income exclusion limits. Second, the bill establishes a new tax credit for employers who provide child care expenses, mirroring the federal tax credit under section 45F of the Internal Revenue Code but limiting the credit to expenses paid or incurred within Minnesota. The credit can be carried forward for up to five years if it exceeds the taxpayer's current tax liability, and for entities like partnerships or S corporations, the credit will be passed through to partners, members, or shareholders proportionally. Both provisions would become effective for taxable years beginning after December 31, 2024, providing a new financial incentive for employers to support working parents' child and dependent care needs.

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https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF1563&ssn=0&y=2025