Bill Text: MN HF2860 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Long-term savings plan provided, and income tax subtraction provided for contributions.
Spectrum: Partisan Bill (Republican 10-0)
Status: (Introduced - Dead) 2014-03-10 - Introduction and first reading, referred to Taxes [HF2860 Detail]
Download: Minnesota-2013-HF2860-Introduced.html
1.2relating to taxation; providing for a long-term care savings plan; providing for
1.3an income tax subtraction for contributions made to the long-term care savings
1.4plan;amending Minnesota Statutes 2012, section 290.01, subdivision 19a;
1.5Minnesota Statutes 2013 Supplement, sections 290.01, subdivision 19b; 290.091,
1.6subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 16A.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. [16A.728] LONG-TERM CARE SAVINGS PLAN.
1.9 Subdivision 1. Definitions. For purposes of this section, the following terms have
1.10the meanings given.
1.11(a) "Long-term care expense" means the cost of long-term care in a long-term care
1.12facility and the cost of care provided in a person's home when the person receiving the
1.13care is unable to perform multiple basic life functions independently.
1.14(b) "Long-term care insurance premiums" means premiums paid for a long-term
1.15care insurance policy, as defined in section 290.0672.
1.16(c) "Participant" means an individual who has entered into a participation agreement
1.17or established an account with a financial institution with which the commissioner has an
1.18agreement under subdivision 2, paragraph (a).
1.19(d) "Qualified individual" means a person who:
1.20(1) incurred long-term care expenses during the taxable year; or
1.21(2) turned 50 years of age or older during the taxable year and who made payments
1.22for long-term care insurance premiums during the taxable year.
1.23 Subd. 2. Commissioner duties; participation agreement. (a) The Minnesota
1.24long-term care savings plan is created. The commissioner shall select the administrator of
1.25the plan. If the commissioner receives no acceptable responses to a request for proposals
2.1for an administrator for the plan by November 1, 2014, the commissioner may enter into
2.2agreements with state chartered or federally chartered banks, savings banks, savings
2.3associations, trust companies, or credit unions, or a subsidiary of such an entity, to
2.4receive contributions in the form of account deposits. The commissioner may adopt and
2.5promulgate rules and regulations to carry out the duties under this subdivision.
2.6(b) If an administrator is selected, participants must enter into participation
2.7agreements with the commissioner, and if an administrator is not selected, participants may
2.8make contributions to an account with a financial institution with which the commissioner
2.9has an agreement under paragraph (a). A lifetime maximum of $200,000 may be
2.10contributed by a participant. The commissioner must adjust the dollar limitation annually
2.11for inflation as provided in section 151 of the Internal Revenue Code of 1986, as amended.
2.12(c) Each participation agreement must provide that the agreement may be canceled
2.13or transferred to a spouse upon the terms and conditions set by the commissioner. If
2.14the participation agreement is canceled or the Minnesota long-term care savings plan is
2.15terminated, a participant may receive the principal amount of all contributions made
2.16by the participant or on behalf of the participant plus the actual investment earnings on
2.17the contributions, less any losses incurred on the contributions. A participant must not
2.18receive more than the fair market value of the account under the participation agreement
2.19on the applicable liquidation date.
2.20(d) A participant retains ownership of all contributions up to the date of use.
2.21(e) State income tax treatment of contributions and investment earnings is as
2.22provided in section 290.01, subdivisions 19a and 19b.
2.23 Subd. 3. Long-term care savings plan trust. If an administrator for the Minnesota
2.24long-term care savings plan is selected under subdivision 2, the Minnesota long-term
2.25care savings plan trust is created. The commissioner is the trustee of the trust and is
2.26responsible for the administration, operation, and maintenance of the plan and has all the
2.27powers necessary to carry out and effectuate the purposes, objectives, and provisions
2.28of the Minnesota long-term care savings plan for the administration, operation, and
2.29maintenance of the trust, except that the investment officer has fiduciary responsibility
2.30to make all decisions regarding the investment of the money in the trust, including the
2.31selection of all investment options and the approval of all fees and other costs charged to
2.32trust assets, except costs for administration, operation, and maintenance of the trust, under
2.33the directions, guidelines, and policies established by the State Board of Investment. The
2.34commissioner may adopt and promulgate rules for the efficient administration, operation,
2.35and maintenance of the trust. The commissioner must not adopt and promulgate rules and
2.36regulations that in any way interfere with the fiduciary responsibility of the state investment
3.1officer to make all decisions regarding the investment of money in the trust. The State
3.2Board of Investment may adopt and promulgate rules and regulations to provide for the
3.3prudent investment of the assets of the trust. The State Board of Investment or its designee
3.4may select and enter into agreements with individuals and entities to provide investment
3.5advice and management of the assets held by the trust, establish investment guidelines,
3.6objectives, and performance standards for the assets held by the trust, and approve any
3.7fees, commissions, and expenses which directly or indirectly affect the return on assets.
3.8 Subd. 4. Authorized withdrawals. A qualified individual may make withdrawals
3.9as a participant in the Minnesota long-term care savings plan to pay or reimburse
3.10long-term care expenses. A qualified individual may make withdrawals to pay or
3.11reimburse long-term care insurance premiums. Any participant who is not a qualified
3.12individual or who makes a withdrawal for any reason other than a transfer of funds to a
3.13spouse, payment of long-term care expenses or long-term care insurance premiums, or
3.14the death of the participant is subject to a ten percent penalty on the amount withdrawn.
3.15The commissioner shall collect the penalty.
3.16EFFECTIVE DATE.This section is effective the day following final enactment.
3.17 Sec. 2. Minnesota Statutes 2012, section 290.01, subdivision 19a, is amended to read:
3.18 Subd. 19a. Additions to federal taxable income. For individuals, estates, and
3.19trusts, there shall be added to federal taxable income:
3.20 (1)(i) interest income on obligations of any state other than Minnesota or a political
3.21or governmental subdivision, municipality, or governmental agency or instrumentality
3.22of any state other than Minnesota exempt from federal income taxes under the Internal
3.23Revenue Code or any other federal statute; and
3.24 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
3.25Code, except:
3.26(A) the portion of the exempt-interest dividends exempt from state taxation under
3.27the laws of the United States; and
3.28(B) the portion of the exempt-interest dividends derived from interest income
3.29on obligations of the state of Minnesota or its political or governmental subdivisions,
3.30municipalities, governmental agencies or instrumentalities, but only if the portion of the
3.31exempt-interest dividends from such Minnesota sources paid to all shareholders represents
3.3295 percent or more of the exempt-interest dividends, including any dividends exempt
3.33under subitem (A), that are paid by the regulated investment company as defined in section
3.34851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
3.35defined in section 851(g) of the Internal Revenue Code, making the payment; and
4.1 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
4.2government described in section 7871(c) of the Internal Revenue Code shall be treated as
4.3interest income on obligations of the state in which the tribe is located;
4.4 (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or
4.5accrued within the taxable year under this chapter and the amount of taxes based on net
4.6income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state
4.7or to any province or territory of Canada, to the extent allowed as a deduction under
4.8section 63(d) of the Internal Revenue Code, but the addition may not be more than the
4.9amount by which the itemized deductions as allowed under section 63(d) of the Internal
4.10Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of
4.11the Internal Revenue Code, disregarding the amounts allowed under sections 63(c)(1)(C)
4.12and 63(c)(1)(E) of the Internal Revenue Code, minus any addition that would have been
4.13required under clause (21) if the taxpayer had claimed the standard deduction. For the
4.14purpose of this paragraph, the disallowance of itemized deductions under section 68 of
4.15the Internal Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise
4.16taxes are the last itemized deductions disallowed;
4.17 (3) the capital gain amount of a lump-sum distribution to which the special tax under
4.18section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
4.19 (4) the amount of income taxes paid or accrued within the taxable year under this
4.20chapter and taxes based on net income paid to any other state or any province or territory
4.21of Canada, to the extent allowed as a deduction in determining federal adjusted gross
4.22income. For the purpose of this paragraph, income taxes do not include the taxes imposed
4.23by sections290.0922, subdivision 1 , paragraph (b),
290.9727 ,
290.9728 , and
290.9729 ;
4.24 (5) the amount of expense, interest, or taxes disallowed pursuant to section290.10
4.25other than expenses or interest used in computing net interest income for the subtraction
4.26allowed under subdivision 19b, clause (1);
4.27 (6) the amount of a partner's pro rata share of net income which does not flow
4.28through to the partner because the partnership elected to pay the tax on the income under
4.29section 6242(a)(2) of the Internal Revenue Code;
4.30 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
4.31Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
4.32in the taxable year generates a deduction for depreciation under section 168(k) and the
4.33activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
4.34the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
4.35limited to excess of the depreciation claimed by the activity under section 168(k) over the
4.36amount of the loss from the activity that is not allowed in the taxable year. In succeeding
5.1taxable years when the losses not allowed in the taxable year are allowed, the depreciation
5.2under section 168(k) is allowed;
5.3 (8) 80 percent of the amount by which the deduction allowed by section 179 of the
5.4Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
5.5Revenue Code of 1986, as amended through December 31, 2003;
5.6 (9) to the extent deducted in computing federal taxable income, the amount of the
5.7deduction allowable under section 199 of the Internal Revenue Code;
5.8 (10) for taxable years beginning before January 1, 2013, the exclusion allowed under
5.9section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
5.10(11) the amount of expenses disallowed under section 290.10, subdivision 2;
5.11 (12) for taxable years beginning before January 1, 2010, the amount deducted for
5.12qualified tuition and related expenses under section 222 of the Internal Revenue Code, to
5.13the extent deducted from gross income;
5.14 (13) for taxable years beginning before January 1, 2010, the amount deducted for
5.15certain expenses of elementary and secondary school teachers under section 62(a)(2)(D)
5.16of the Internal Revenue Code, to the extent deducted from gross income;
5.17(14) the additional standard deduction for property taxes payable that is allowable
5.18under section 63(c)(1)(C) of the Internal Revenue Code;
5.19(15) the additional standard deduction for qualified motor vehicle sales taxes
5.20allowable under section 63(c)(1)(E) of the Internal Revenue Code;
5.21(16) discharge of indebtedness income resulting from reacquisition of business
5.22indebtedness and deferred under section 108(i) of the Internal Revenue Code;
5.23(17) the amount of unemployment compensation exempt from tax under section
5.2485(c) of the Internal Revenue Code;
5.25(18) changes to federal taxable income attributable to a net operating loss that the
5.26taxpayer elected to carry back for more than two years for federal purposes but for which
5.27the losses can be carried back for only two years under section290.095, subdivision
5.2811 , paragraph (c);
5.29(19) to the extent included in the computation of federal taxable income in taxable
5.30years beginning after December 31, 2010, the amount of disallowed itemized deductions,
5.31but the amount of disallowed itemized deductions plus the addition required under clause
5.32(2) may not be more than the amount by which the itemized deductions as allowed under
5.33section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction
5.34as defined in section 63(c) of the Internal Revenue Code, disregarding the amounts
5.35allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code, and
6.1reduced by any addition that would have been required under clause (21) if the taxpayer
6.2had claimed the standard deduction:
6.3(i) the amount of disallowed itemized deductions is equal to the lesser of:
6.4(A) three percent of the excess of the taxpayer's federal adjusted gross income
6.5over the applicable amount; or
6.6(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
6.7taxpayer under the Internal Revenue Code for the taxable year;
6.8(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a
6.9married individual filing a separate return. Each dollar amount shall be increased by
6.10an amount equal to:
6.11(A) such dollar amount, multiplied by
6.12(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
6.13Revenue Code for the calendar year in which the taxable year begins, by substituting
6.14"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;
6.15(iii) the term "itemized deductions" does not include:
6.16(A) the deduction for medical expenses under section 213 of the Internal Revenue
6.17Code;
6.18(B) any deduction for investment interest as defined in section 163(d) of the Internal
6.19Revenue Code; and
6.20(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
6.21theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
6.22Code or for losses described in section 165(d) of the Internal Revenue Code;
6.23(20) to the extent included in federal taxable income in taxable years beginning after
6.24December 31, 2010, the amount of disallowed personal exemptions for taxpayers with
6.25federal adjusted gross income over the threshold amount:
6.26(i) the disallowed personal exemption amount is equal to the dollar amount of the
6.27personal exemptions claimed by the taxpayer in the computation of federal taxable income
6.28multiplied by the applicable percentage;
6.29(ii) "applicable percentage" means two percentage points for each $2,500 (or
6.30fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
6.31year exceeds the threshold amount. In the case of a married individual filing a separate
6.32return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In
6.33no event shall the applicable percentage exceed 100 percent;
6.34(iii) the term "threshold amount" means:
6.35(A) $150,000 in the case of a joint return or a surviving spouse;
6.36(B) $125,000 in the case of a head of a household;
7.1(C) $100,000 in the case of an individual who is not married and who is not a
7.2surviving spouse or head of a household; and
7.3(D) $75,000 in the case of a married individual filing a separate return; and
7.4(iv) the thresholds shall be increased by an amount equal to:
7.5(A) such dollar amount, multiplied by
7.6(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
7.7Revenue Code for the calendar year in which the taxable year begins, by substituting
7.8"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;and
7.9(21) to the extent deducted in the computation of federal taxable income, for taxable
7.10years beginning after December 31, 2010, and before January 1, 2013, the difference
7.11between the standard deduction allowed under section 63(c) of the Internal Revenue Code
7.12and the standard deduction allowed for 2011 and 2012 under the Internal Revenue Code as
7.13amended through December 1, 2010.; and
7.14(22) the amount withdrawn by a participant in the Minnesota long-term care savings
7.15plan by a person who is not a qualified individual or for any reason other than a transfer
7.16of funds to a spouse, payment of long-term care expenses or long-term care insurance
7.17premiums, or the death of the participant, including withdrawals made by reason of
7.18cancellation of the participation agreement or termination of the plan.
7.19EFFECTIVE DATE.This section is effective for taxable years beginning after
7.20December 31, 2013.
7.21 Sec. 3. Minnesota Statutes 2013 Supplement, section 290.01, subdivision 19b, is
7.22amended to read:
7.23 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
7.24and trusts, there shall be subtracted from federal taxable income:
7.25 (1) net interest income on obligations of any authority, commission, or
7.26instrumentality of the United States to the extent includable in taxable income for federal
7.27income tax purposes but exempt from state income tax under the laws of the United States;
7.28 (2) if included in federal taxable income, the amount of any overpayment of income
7.29tax to Minnesota or to any other state, for any previous taxable year, whether the amount
7.30is received as a refund or as a credit to another taxable year's income tax liability;
7.31 (3) the amount paid to others, less the amount used to claim the credit allowed under
7.32section290.0674 , not to exceed $1,625 for each qualifying child in grades kindergarten
7.33to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
7.34transportation of each qualifying child in attending an elementary or secondary school
7.35situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
8.1resident of this state may legally fulfill the state's compulsory attendance laws, which
8.2is not operated for profit, and which adheres to the provisions of the Civil Rights Act
8.3of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
8.4tuition as defined in section290.0674, subdivision 1 , clause (1). As used in this clause,
8.5"textbooks" includes books and other instructional materials and equipment purchased
8.6or leased for use in elementary and secondary schools in teaching only those subjects
8.7legally and commonly taught in public elementary and secondary schools in this state.
8.8Equipment expenses qualifying for deduction includes expenses as defined and limited in
8.9section290.0674, subdivision 1 , clause (3). "Textbooks" does not include instructional
8.10books and materials used in the teaching of religious tenets, doctrines, or worship, the
8.11purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
8.12or materials for, or transportation to, extracurricular activities including sporting events,
8.13musical or dramatic events, speech activities, driver's education, or similar programs. No
8.14deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
8.15the qualifying child's vehicle to provide such transportation for a qualifying child. For
8.16purposes of the subtraction provided by this clause, "qualifying child" has the meaning
8.17given in section 32(c)(3) of the Internal Revenue Code;
8.18 (4) income as provided under section290.0802 ;
8.19 (5) to the extent included in federal adjusted gross income, income realized on
8.20disposition of property exempt from tax under section290.491 ;
8.21 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
8.22of the Internal Revenue Code in determining federal taxable income by an individual
8.23who does not itemize deductions for federal income tax purposes for the taxable year, an
8.24amount equal to 50 percent of the excess of charitable contributions over $500 allowable
8.25as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
8.26under the provisions of Public Law 109-1 and Public Law 111-126;
8.27 (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
8.28qualify for a credit under section290.06, subdivision 22 , an amount equal to the carryover
8.29of subnational foreign taxes for the taxable year, but not to exceed the total subnational
8.30foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
8.31"federal foreign tax credit" means the credit allowed under section 27 of the Internal
8.32Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
8.33under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
8.34the extent they exceed the federal foreign tax credit;
8.35 (8) in each of the five tax years immediately following the tax year in which an
8.36addition is required under subdivision 19a, clause (7), or 19c, clause (12), in the case of a
9.1shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
9.2delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
9.3of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
9.4clause (12), in the case of a shareholder of an S corporation, minus the positive value of
9.5any net operating loss under section 172 of the Internal Revenue Code generated for the
9.6tax year of the addition. The resulting delayed depreciation cannot be less than zero;
9.7 (9) job opportunity building zone income as provided under section469.316 ;
9.8 (10) to the extent included in federal taxable income, the amount of compensation
9.9paid to members of the Minnesota National Guard or other reserve components of the
9.10United States military for active service, excluding compensation for services performed
9.11under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
9.12service" means (i) state active service as defined in section190.05, subdivision 5a , clause
9.13(1); or (ii) federally funded state active service as defined in section190.05, subdivision
9.145b , but "active service" excludes service performed in accordance with section
190.08,
9.15subdivision 3 ;
9.16 (11) to the extent included in federal taxable income, the amount of compensation
9.17paid to Minnesota residents who are members of the armed forces of the United States
9.18or United Nations for active duty performed under United States Code, title 10; or the
9.19authority of the United Nations;
9.20 (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
9.21qualified donor's donation, while living, of one or more of the qualified donor's organs
9.22to another person for human organ transplantation. For purposes of this clause, "organ"
9.23means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
9.24"human organ transplantation" means the medical procedure by which transfer of a human
9.25organ is made from the body of one person to the body of another person; "qualified
9.26expenses" means unreimbursed expenses for both the individual and the qualified donor
9.27for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
9.28may be subtracted under this clause only once; and "qualified donor" means the individual
9.29or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
9.30individual may claim the subtraction in this clause for each instance of organ donation for
9.31transplantation during the taxable year in which the qualified expenses occur;
9.32 (13) in each of the five tax years immediately following the tax year in which an
9.33addition is required under subdivision 19a, clause (8), or 19c, clause (13), in the case of a
9.34shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
9.35addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (13), in the
9.36case of a shareholder of a corporation that is an S corporation, minus the positive value of
10.1any net operating loss under section 172 of the Internal Revenue Code generated for the
10.2tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
10.3subtraction is not allowed under this clause;
10.4 (14) to the extent included in the federal taxable income of a nonresident of
10.5Minnesota, compensation paid to a service member as defined in United States Code, title
10.610, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
10.7Act, Public Law 108-189, section 101(2);
10.8 (15) to the extent included in federal taxable income, the amount of national service
10.9educational awards received from the National Service Trust under United States Code,
10.10title 42, sections 12601 to 12604, for service in an approved Americorps National Service
10.11program;
10.12(16) to the extent included in federal taxable income, discharge of indebtedness
10.13income resulting from reacquisition of business indebtedness included in federal taxable
10.14income under section 108(i) of the Internal Revenue Code. This subtraction applies only
10.15to the extent that the income was included in net income in a prior year as a result of the
10.16addition under section290.01, subdivision 19a , clause (16);
10.17(17) the amount of the net operating loss allowed under section290.095, subdivision
10.1811 , paragraph (c); and
10.19(18) the amount of expenses not allowed for federal income tax purposes due
10.20to claiming the railroad track maintenance credit under section 45G(a) of the Internal
10.21Revenue Code.; and
10.22(19) to the extent not deducted in determining federal taxable income, an amount
10.23equal to contributions made to the Minnesota long-term care savings plan under section
10.2416A.726, up to a maximum of $2,000 for married individuals filing joint returns and
10.25$1,000 for any other return, and any investment earnings made as a participant in the
10.26Minnesota long-term care savings plan.
10.27EFFECTIVE DATE.This section is effective for taxable years beginning after
10.28December 31, 2013.
10.29 Sec. 4. Minnesota Statutes 2013 Supplement, section 290.091, subdivision 2, is
10.30amended to read:
10.31 Subd. 2. Definitions. For purposes of the tax imposed by this section, the following
10.32terms have the meanings given:
10.33 (a) "Alternative minimum taxable income" means the sum of the following for
10.34the taxable year:
11.1 (1) the taxpayer's federal alternative minimum taxable income as defined in section
11.255(b)(2) of the Internal Revenue Code;
11.3 (2) the taxpayer's itemized deductions allowed in computing federal alternative
11.4minimum taxable income, but excluding:
11.5 (i) the charitable contribution deduction under section 170 of the Internal Revenue
11.6Code;
11.7 (ii) the medical expense deduction;
11.8 (iii) the casualty, theft, and disaster loss deduction; and
11.9 (iv) the impairment-related work expenses of a disabled person;
11.10 (3) for depletion allowances computed under section 613A(c) of the Internal
11.11Revenue Code, with respect to each property (as defined in section 614 of the Internal
11.12Revenue Code), to the extent not included in federal alternative minimum taxable income,
11.13the excess of the deduction for depletion allowable under section 611 of the Internal
11.14Revenue Code for the taxable year over the adjusted basis of the property at the end of the
11.15taxable year (determined without regard to the depletion deduction for the taxable year);
11.16 (4) to the extent not included in federal alternative minimum taxable income, the
11.17amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
11.18Internal Revenue Code determined without regard to subparagraph (E);
11.19 (5) to the extent not included in federal alternative minimum taxable income, the
11.20amount of interest income as provided by section290.01, subdivision 19a , clause (1); and
11.21 (6) the amount of addition required by section290.01, subdivision 19a , clauses (7)
11.22to (9), (12), (13), and (16) to (18);
11.23 less the sum of the amounts determined under the following:
11.24 (1) interest income as defined in section290.01, subdivision 19b , clause (1);
11.25 (2) an overpayment of state income tax as provided by section290.01, subdivision
11.2619b , clause (2), to the extent included in federal alternative minimum taxable income;
11.27 (3) the amount of investment interest paid or accrued within the taxable year on
11.28indebtedness to the extent that the amount does not exceed net investment income, as
11.29defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
11.30amounts deducted in computing federal adjusted gross income;
11.31 (4) amounts subtracted from federal taxable income as provided by section290.01,
11.32subdivision 19b , clauses (6), (8) to (14), and (16), and (19); and
11.33(5) the amount of the net operating loss allowed under section290.095, subdivision
11.3411 , paragraph (c).
11.35 In the case of an estate or trust, alternative minimum taxable income must be
11.36computed as provided in section 59(c) of the Internal Revenue Code.
12.1 (b) "Investment interest" means investment interest as defined in section 163(d)(3)
12.2of the Internal Revenue Code.
12.3 (c) "Net minimum tax" means the minimum tax imposed by this section.
12.4 (d) "Regular tax" means the tax that would be imposed under this chapter (without
12.5regard to this section and section 290.032), reduced by the sum of the nonrefundable
12.6credits allowed under this chapter.
12.7 (e) "Tentative minimum tax" equals6.75 percent of alternative minimum taxable
12.8income after subtracting the exemption amount determined under subdivision 3.
12.9EFFECTIVE DATE.This section is effective for taxable years beginning after
12.10December 31, 2013.
1.3an income tax subtraction for contributions made to the long-term care savings
1.4plan;amending Minnesota Statutes 2012, section 290.01, subdivision 19a;
1.5Minnesota Statutes 2013 Supplement, sections 290.01, subdivision 19b; 290.091,
1.6subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 16A.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. [16A.728] LONG-TERM CARE SAVINGS PLAN.
1.9 Subdivision 1. Definitions. For purposes of this section, the following terms have
1.10the meanings given.
1.11(a) "Long-term care expense" means the cost of long-term care in a long-term care
1.12facility and the cost of care provided in a person's home when the person receiving the
1.13care is unable to perform multiple basic life functions independently.
1.14(b) "Long-term care insurance premiums" means premiums paid for a long-term
1.15care insurance policy, as defined in section 290.0672.
1.16(c) "Participant" means an individual who has entered into a participation agreement
1.17or established an account with a financial institution with which the commissioner has an
1.18agreement under subdivision 2, paragraph (a).
1.19(d) "Qualified individual" means a person who:
1.20(1) incurred long-term care expenses during the taxable year; or
1.21(2) turned 50 years of age or older during the taxable year and who made payments
1.22for long-term care insurance premiums during the taxable year.
1.23 Subd. 2. Commissioner duties; participation agreement. (a) The Minnesota
1.24long-term care savings plan is created. The commissioner shall select the administrator of
1.25the plan. If the commissioner receives no acceptable responses to a request for proposals
2.1for an administrator for the plan by November 1, 2014, the commissioner may enter into
2.2agreements with state chartered or federally chartered banks, savings banks, savings
2.3associations, trust companies, or credit unions, or a subsidiary of such an entity, to
2.4receive contributions in the form of account deposits. The commissioner may adopt and
2.5promulgate rules and regulations to carry out the duties under this subdivision.
2.6(b) If an administrator is selected, participants must enter into participation
2.7agreements with the commissioner, and if an administrator is not selected, participants may
2.8make contributions to an account with a financial institution with which the commissioner
2.9has an agreement under paragraph (a). A lifetime maximum of $200,000 may be
2.10contributed by a participant. The commissioner must adjust the dollar limitation annually
2.11for inflation as provided in section 151 of the Internal Revenue Code of 1986, as amended.
2.12(c) Each participation agreement must provide that the agreement may be canceled
2.13or transferred to a spouse upon the terms and conditions set by the commissioner. If
2.14the participation agreement is canceled or the Minnesota long-term care savings plan is
2.15terminated, a participant may receive the principal amount of all contributions made
2.16by the participant or on behalf of the participant plus the actual investment earnings on
2.17the contributions, less any losses incurred on the contributions. A participant must not
2.18receive more than the fair market value of the account under the participation agreement
2.19on the applicable liquidation date.
2.20(d) A participant retains ownership of all contributions up to the date of use.
2.21(e) State income tax treatment of contributions and investment earnings is as
2.22provided in section 290.01, subdivisions 19a and 19b.
2.23 Subd. 3. Long-term care savings plan trust. If an administrator for the Minnesota
2.24long-term care savings plan is selected under subdivision 2, the Minnesota long-term
2.25care savings plan trust is created. The commissioner is the trustee of the trust and is
2.26responsible for the administration, operation, and maintenance of the plan and has all the
2.27powers necessary to carry out and effectuate the purposes, objectives, and provisions
2.28of the Minnesota long-term care savings plan for the administration, operation, and
2.29maintenance of the trust, except that the investment officer has fiduciary responsibility
2.30to make all decisions regarding the investment of the money in the trust, including the
2.31selection of all investment options and the approval of all fees and other costs charged to
2.32trust assets, except costs for administration, operation, and maintenance of the trust, under
2.33the directions, guidelines, and policies established by the State Board of Investment. The
2.34commissioner may adopt and promulgate rules for the efficient administration, operation,
2.35and maintenance of the trust. The commissioner must not adopt and promulgate rules and
2.36regulations that in any way interfere with the fiduciary responsibility of the state investment
3.1officer to make all decisions regarding the investment of money in the trust. The State
3.2Board of Investment may adopt and promulgate rules and regulations to provide for the
3.3prudent investment of the assets of the trust. The State Board of Investment or its designee
3.4may select and enter into agreements with individuals and entities to provide investment
3.5advice and management of the assets held by the trust, establish investment guidelines,
3.6objectives, and performance standards for the assets held by the trust, and approve any
3.7fees, commissions, and expenses which directly or indirectly affect the return on assets.
3.8 Subd. 4. Authorized withdrawals. A qualified individual may make withdrawals
3.9as a participant in the Minnesota long-term care savings plan to pay or reimburse
3.10long-term care expenses. A qualified individual may make withdrawals to pay or
3.11reimburse long-term care insurance premiums. Any participant who is not a qualified
3.12individual or who makes a withdrawal for any reason other than a transfer of funds to a
3.13spouse, payment of long-term care expenses or long-term care insurance premiums, or
3.14the death of the participant is subject to a ten percent penalty on the amount withdrawn.
3.15The commissioner shall collect the penalty.
3.16EFFECTIVE DATE.This section is effective the day following final enactment.
3.17 Sec. 2. Minnesota Statutes 2012, section 290.01, subdivision 19a, is amended to read:
3.18 Subd. 19a. Additions to federal taxable income. For individuals, estates, and
3.19trusts, there shall be added to federal taxable income:
3.20 (1)(i) interest income on obligations of any state other than Minnesota or a political
3.21or governmental subdivision, municipality, or governmental agency or instrumentality
3.22of any state other than Minnesota exempt from federal income taxes under the Internal
3.23Revenue Code or any other federal statute; and
3.24 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
3.25Code, except:
3.26(A) the portion of the exempt-interest dividends exempt from state taxation under
3.27the laws of the United States; and
3.28(B) the portion of the exempt-interest dividends derived from interest income
3.29on obligations of the state of Minnesota or its political or governmental subdivisions,
3.30municipalities, governmental agencies or instrumentalities, but only if the portion of the
3.31exempt-interest dividends from such Minnesota sources paid to all shareholders represents
3.3295 percent or more of the exempt-interest dividends, including any dividends exempt
3.33under subitem (A), that are paid by the regulated investment company as defined in section
3.34851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
3.35defined in section 851(g) of the Internal Revenue Code, making the payment; and
4.1 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
4.2government described in section 7871(c) of the Internal Revenue Code shall be treated as
4.3interest income on obligations of the state in which the tribe is located;
4.4 (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or
4.5accrued within the taxable year under this chapter and the amount of taxes based on net
4.6income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state
4.7or to any province or territory of Canada, to the extent allowed as a deduction under
4.8section 63(d) of the Internal Revenue Code, but the addition may not be more than the
4.9amount by which the itemized deductions as allowed under section 63(d) of the Internal
4.10Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of
4.11the Internal Revenue Code, disregarding the amounts allowed under sections 63(c)(1)(C)
4.12and 63(c)(1)(E) of the Internal Revenue Code, minus any addition that would have been
4.13required under clause (21) if the taxpayer had claimed the standard deduction. For the
4.14purpose of this paragraph, the disallowance of itemized deductions under section 68 of
4.15the Internal Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise
4.16taxes are the last itemized deductions disallowed;
4.17 (3) the capital gain amount of a lump-sum distribution to which the special tax under
4.18section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
4.19 (4) the amount of income taxes paid or accrued within the taxable year under this
4.20chapter and taxes based on net income paid to any other state or any province or territory
4.21of Canada, to the extent allowed as a deduction in determining federal adjusted gross
4.22income. For the purpose of this paragraph, income taxes do not include the taxes imposed
4.23by sections
4.24 (5) the amount of expense, interest, or taxes disallowed pursuant to section
4.26allowed under subdivision 19b, clause (1);
4.27 (6) the amount of a partner's pro rata share of net income which does not flow
4.28through to the partner because the partnership elected to pay the tax on the income under
4.29section 6242(a)(2) of the Internal Revenue Code;
4.30 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
4.31Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
4.32in the taxable year generates a deduction for depreciation under section 168(k) and the
4.33activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
4.34the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
4.35limited to excess of the depreciation claimed by the activity under section 168(k) over the
4.36amount of the loss from the activity that is not allowed in the taxable year. In succeeding
5.1taxable years when the losses not allowed in the taxable year are allowed, the depreciation
5.2under section 168(k) is allowed;
5.3 (8) 80 percent of the amount by which the deduction allowed by section 179 of the
5.4Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
5.5Revenue Code of 1986, as amended through December 31, 2003;
5.6 (9) to the extent deducted in computing federal taxable income, the amount of the
5.7deduction allowable under section 199 of the Internal Revenue Code;
5.8 (10) for taxable years beginning before January 1, 2013, the exclusion allowed under
5.9section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
5.10(11) the amount of expenses disallowed under section 290.10, subdivision 2;
5.11 (12) for taxable years beginning before January 1, 2010, the amount deducted for
5.12qualified tuition and related expenses under section 222 of the Internal Revenue Code, to
5.13the extent deducted from gross income;
5.14 (13) for taxable years beginning before January 1, 2010, the amount deducted for
5.15certain expenses of elementary and secondary school teachers under section 62(a)(2)(D)
5.16of the Internal Revenue Code, to the extent deducted from gross income;
5.17(14) the additional standard deduction for property taxes payable that is allowable
5.18under section 63(c)(1)(C) of the Internal Revenue Code;
5.19(15) the additional standard deduction for qualified motor vehicle sales taxes
5.20allowable under section 63(c)(1)(E) of the Internal Revenue Code;
5.21(16) discharge of indebtedness income resulting from reacquisition of business
5.22indebtedness and deferred under section 108(i) of the Internal Revenue Code;
5.23(17) the amount of unemployment compensation exempt from tax under section
5.2485(c) of the Internal Revenue Code;
5.25(18) changes to federal taxable income attributable to a net operating loss that the
5.26taxpayer elected to carry back for more than two years for federal purposes but for which
5.27the losses can be carried back for only two years under section
5.2811
5.29(19) to the extent included in the computation of federal taxable income in taxable
5.30years beginning after December 31, 2010, the amount of disallowed itemized deductions,
5.31but the amount of disallowed itemized deductions plus the addition required under clause
5.32(2) may not be more than the amount by which the itemized deductions as allowed under
5.33section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction
5.34as defined in section 63(c) of the Internal Revenue Code, disregarding the amounts
5.35allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code, and
6.1reduced by any addition that would have been required under clause (21) if the taxpayer
6.2had claimed the standard deduction:
6.3(i) the amount of disallowed itemized deductions is equal to the lesser of:
6.4(A) three percent of the excess of the taxpayer's federal adjusted gross income
6.5over the applicable amount; or
6.6(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
6.7taxpayer under the Internal Revenue Code for the taxable year;
6.8(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a
6.9married individual filing a separate return. Each dollar amount shall be increased by
6.10an amount equal to:
6.11(A) such dollar amount, multiplied by
6.12(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
6.13Revenue Code for the calendar year in which the taxable year begins, by substituting
6.14"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;
6.15(iii) the term "itemized deductions" does not include:
6.16(A) the deduction for medical expenses under section 213 of the Internal Revenue
6.17Code;
6.18(B) any deduction for investment interest as defined in section 163(d) of the Internal
6.19Revenue Code; and
6.20(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
6.21theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
6.22Code or for losses described in section 165(d) of the Internal Revenue Code;
6.23(20) to the extent included in federal taxable income in taxable years beginning after
6.24December 31, 2010, the amount of disallowed personal exemptions for taxpayers with
6.25federal adjusted gross income over the threshold amount:
6.26(i) the disallowed personal exemption amount is equal to the dollar amount of the
6.27personal exemptions claimed by the taxpayer in the computation of federal taxable income
6.28multiplied by the applicable percentage;
6.29(ii) "applicable percentage" means two percentage points for each $2,500 (or
6.30fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
6.31year exceeds the threshold amount. In the case of a married individual filing a separate
6.32return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In
6.33no event shall the applicable percentage exceed 100 percent;
6.34(iii) the term "threshold amount" means:
6.35(A) $150,000 in the case of a joint return or a surviving spouse;
6.36(B) $125,000 in the case of a head of a household;
7.1(C) $100,000 in the case of an individual who is not married and who is not a
7.2surviving spouse or head of a household; and
7.3(D) $75,000 in the case of a married individual filing a separate return; and
7.4(iv) the thresholds shall be increased by an amount equal to:
7.5(A) such dollar amount, multiplied by
7.6(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
7.7Revenue Code for the calendar year in which the taxable year begins, by substituting
7.8"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;
7.9(21) to the extent deducted in the computation of federal taxable income, for taxable
7.10years beginning after December 31, 2010, and before January 1, 2013, the difference
7.11between the standard deduction allowed under section 63(c) of the Internal Revenue Code
7.12and the standard deduction allowed for 2011 and 2012 under the Internal Revenue Code as
7.13amended through December 1, 2010
7.14(22) the amount withdrawn by a participant in the Minnesota long-term care savings
7.15plan by a person who is not a qualified individual or for any reason other than a transfer
7.16of funds to a spouse, payment of long-term care expenses or long-term care insurance
7.17premiums, or the death of the participant, including withdrawals made by reason of
7.18cancellation of the participation agreement or termination of the plan.
7.19EFFECTIVE DATE.This section is effective for taxable years beginning after
7.20December 31, 2013.
7.21 Sec. 3. Minnesota Statutes 2013 Supplement, section 290.01, subdivision 19b, is
7.22amended to read:
7.23 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
7.24and trusts, there shall be subtracted from federal taxable income:
7.25 (1) net interest income on obligations of any authority, commission, or
7.26instrumentality of the United States to the extent includable in taxable income for federal
7.27income tax purposes but exempt from state income tax under the laws of the United States;
7.28 (2) if included in federal taxable income, the amount of any overpayment of income
7.29tax to Minnesota or to any other state, for any previous taxable year, whether the amount
7.30is received as a refund or as a credit to another taxable year's income tax liability;
7.31 (3) the amount paid to others, less the amount used to claim the credit allowed under
7.32section
7.33to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
7.34transportation of each qualifying child in attending an elementary or secondary school
7.35situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
8.1resident of this state may legally fulfill the state's compulsory attendance laws, which
8.2is not operated for profit, and which adheres to the provisions of the Civil Rights Act
8.3of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
8.4tuition as defined in section
8.5"textbooks" includes books and other instructional materials and equipment purchased
8.6or leased for use in elementary and secondary schools in teaching only those subjects
8.7legally and commonly taught in public elementary and secondary schools in this state.
8.8Equipment expenses qualifying for deduction includes expenses as defined and limited in
8.9section
8.10books and materials used in the teaching of religious tenets, doctrines, or worship, the
8.11purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
8.12or materials for, or transportation to, extracurricular activities including sporting events,
8.13musical or dramatic events, speech activities, driver's education, or similar programs. No
8.14deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
8.15the qualifying child's vehicle to provide such transportation for a qualifying child. For
8.16purposes of the subtraction provided by this clause, "qualifying child" has the meaning
8.17given in section 32(c)(3) of the Internal Revenue Code;
8.18 (4) income as provided under section
8.19 (5) to the extent included in federal adjusted gross income, income realized on
8.20disposition of property exempt from tax under section
8.21 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
8.22of the Internal Revenue Code in determining federal taxable income by an individual
8.23who does not itemize deductions for federal income tax purposes for the taxable year, an
8.24amount equal to 50 percent of the excess of charitable contributions over $500 allowable
8.25as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
8.26under the provisions of Public Law 109-1 and Public Law 111-126;
8.27 (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
8.28qualify for a credit under section
8.29of subnational foreign taxes for the taxable year, but not to exceed the total subnational
8.30foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
8.31"federal foreign tax credit" means the credit allowed under section 27 of the Internal
8.32Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
8.33under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
8.34the extent they exceed the federal foreign tax credit;
8.35 (8) in each of the five tax years immediately following the tax year in which an
8.36addition is required under subdivision 19a, clause (7), or 19c, clause (12), in the case of a
9.1shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
9.2delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
9.3of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
9.4clause (12), in the case of a shareholder of an S corporation, minus the positive value of
9.5any net operating loss under section 172 of the Internal Revenue Code generated for the
9.6tax year of the addition. The resulting delayed depreciation cannot be less than zero;
9.7 (9) job opportunity building zone income as provided under section
9.8 (10) to the extent included in federal taxable income, the amount of compensation
9.9paid to members of the Minnesota National Guard or other reserve components of the
9.10United States military for active service, excluding compensation for services performed
9.11under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
9.12service" means (i) state active service as defined in section
9.13(1); or (ii) federally funded state active service as defined in section
9.145b
9.15subdivision 3
9.16 (11) to the extent included in federal taxable income, the amount of compensation
9.17paid to Minnesota residents who are members of the armed forces of the United States
9.18or United Nations for active duty performed under United States Code, title 10; or the
9.19authority of the United Nations;
9.20 (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
9.21qualified donor's donation, while living, of one or more of the qualified donor's organs
9.22to another person for human organ transplantation. For purposes of this clause, "organ"
9.23means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
9.24"human organ transplantation" means the medical procedure by which transfer of a human
9.25organ is made from the body of one person to the body of another person; "qualified
9.26expenses" means unreimbursed expenses for both the individual and the qualified donor
9.27for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
9.28may be subtracted under this clause only once; and "qualified donor" means the individual
9.29or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
9.30individual may claim the subtraction in this clause for each instance of organ donation for
9.31transplantation during the taxable year in which the qualified expenses occur;
9.32 (13) in each of the five tax years immediately following the tax year in which an
9.33addition is required under subdivision 19a, clause (8), or 19c, clause (13), in the case of a
9.34shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
9.35addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (13), in the
9.36case of a shareholder of a corporation that is an S corporation, minus the positive value of
10.1any net operating loss under section 172 of the Internal Revenue Code generated for the
10.2tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
10.3subtraction is not allowed under this clause;
10.4 (14) to the extent included in the federal taxable income of a nonresident of
10.5Minnesota, compensation paid to a service member as defined in United States Code, title
10.610, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
10.7Act, Public Law 108-189, section 101(2);
10.8 (15) to the extent included in federal taxable income, the amount of national service
10.9educational awards received from the National Service Trust under United States Code,
10.10title 42, sections 12601 to 12604, for service in an approved Americorps National Service
10.11program;
10.12(16) to the extent included in federal taxable income, discharge of indebtedness
10.13income resulting from reacquisition of business indebtedness included in federal taxable
10.14income under section 108(i) of the Internal Revenue Code. This subtraction applies only
10.15to the extent that the income was included in net income in a prior year as a result of the
10.16addition under section
10.17(17) the amount of the net operating loss allowed under section
10.1811
10.19(18) the amount of expenses not allowed for federal income tax purposes due
10.20to claiming the railroad track maintenance credit under section 45G(a) of the Internal
10.21Revenue Code
10.22(19) to the extent not deducted in determining federal taxable income, an amount
10.23equal to contributions made to the Minnesota long-term care savings plan under section
10.2416A.726, up to a maximum of $2,000 for married individuals filing joint returns and
10.25$1,000 for any other return, and any investment earnings made as a participant in the
10.26Minnesota long-term care savings plan.
10.27EFFECTIVE DATE.This section is effective for taxable years beginning after
10.28December 31, 2013.
10.29 Sec. 4. Minnesota Statutes 2013 Supplement, section 290.091, subdivision 2, is
10.30amended to read:
10.31 Subd. 2. Definitions. For purposes of the tax imposed by this section, the following
10.32terms have the meanings given:
10.33 (a) "Alternative minimum taxable income" means the sum of the following for
10.34the taxable year:
11.1 (1) the taxpayer's federal alternative minimum taxable income as defined in section
11.255(b)(2) of the Internal Revenue Code;
11.3 (2) the taxpayer's itemized deductions allowed in computing federal alternative
11.4minimum taxable income, but excluding:
11.5 (i) the charitable contribution deduction under section 170 of the Internal Revenue
11.6Code;
11.7 (ii) the medical expense deduction;
11.8 (iii) the casualty, theft, and disaster loss deduction; and
11.9 (iv) the impairment-related work expenses of a disabled person;
11.10 (3) for depletion allowances computed under section 613A(c) of the Internal
11.11Revenue Code, with respect to each property (as defined in section 614 of the Internal
11.12Revenue Code), to the extent not included in federal alternative minimum taxable income,
11.13the excess of the deduction for depletion allowable under section 611 of the Internal
11.14Revenue Code for the taxable year over the adjusted basis of the property at the end of the
11.15taxable year (determined without regard to the depletion deduction for the taxable year);
11.16 (4) to the extent not included in federal alternative minimum taxable income, the
11.17amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
11.18Internal Revenue Code determined without regard to subparagraph (E);
11.19 (5) to the extent not included in federal alternative minimum taxable income, the
11.20amount of interest income as provided by section
11.21 (6) the amount of addition required by section
11.22to (9), (12), (13), and (16) to (18);
11.23 less the sum of the amounts determined under the following:
11.24 (1) interest income as defined in section
11.25 (2) an overpayment of state income tax as provided by section
11.2619b
11.27 (3) the amount of investment interest paid or accrued within the taxable year on
11.28indebtedness to the extent that the amount does not exceed net investment income, as
11.29defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
11.30amounts deducted in computing federal adjusted gross income;
11.31 (4) amounts subtracted from federal taxable income as provided by section
11.32subdivision 19b
11.33(5) the amount of the net operating loss allowed under section
11.3411
11.35 In the case of an estate or trust, alternative minimum taxable income must be
11.36computed as provided in section 59(c) of the Internal Revenue Code.
12.1 (b) "Investment interest" means investment interest as defined in section 163(d)(3)
12.2of the Internal Revenue Code.
12.3 (c) "Net minimum tax" means the minimum tax imposed by this section.
12.4 (d) "Regular tax" means the tax that would be imposed under this chapter (without
12.5regard to this section and section 290.032), reduced by the sum of the nonrefundable
12.6credits allowed under this chapter.
12.7 (e) "Tentative minimum tax" equals
12.8income after subtracting the exemption amount determined under subdivision 3.
12.9EFFECTIVE DATE.This section is effective for taxable years beginning after
12.10December 31, 2013.
