Bill Text: MN HF3200 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Working family credit phaseout for married filers extended to conform to the Internal Revenue Code, and maximum allowed credit increased.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-03-19 - Introduction and first reading, referred to Taxes [HF3200 Detail]
Download: Minnesota-2013-HF3200-Introduced.html
1.2relating to taxation; individual income; extending the working family credit
1.3phaseout for married filers to conform to the Internal Revenue Code; increasing
1.4the maximum allowed credit;amending Minnesota Statutes 2012, section
1.5290.0671, subdivisions 1, 7.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 290.0671, subdivision 1, is amended to read:
1.8 Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax
1.9imposed by this chapter equal to a percentage of earned income. To receive a credit, a
1.10taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
1.11(b) For individuals with no qualifying children, the credit equals1.9125 2.87 percent
1.12of the first$4,620 $4,980 of earned income. The credit is reduced by 1.9125 2.39 percent
1.13of earned income or adjusted gross income, whichever is greater, in excess of$5,770
1.14 $8,620, but in no case is the credit less than zero.
1.15(c) For individuals with one qualifying child, the credit equals8.5 12.75 percent of
1.16the first$6,920 $8,930 of earned income and 8.5 percent of earned income over $12,080
1.17but less than $13,450. The credit is reduced by 5.73 7.16 percent of earned income or
1.18adjusted gross income, whichever is greater, in excess of$15,080 $22,560, but in no
1.19case is the credit less than zero.
1.20(d) For individuals with two or more qualifying children, the credit equalsten 15
1.21 percent of the first$9,720 $14,650 of earned income and 20 percent of earned income
1.22over $14,860 but less than $16,800. The credit is reduced by 10.3 12.88 percent of earned
1.23income or adjusted gross income, whichever is greater, in excess of$17,890 $26,620,
1.24but in no case is the credit less than zero.
2.1(e) For a nonresident or part-year resident, the credit must be allocated based on the
2.2percentage calculated under section290.06, subdivision 2c , paragraph (e).
2.3(f) For a person who was a resident for the entire tax year and has earned income
2.4not subject to tax under this chapter, including income excluded under section290.01,
2.5subdivision 19b , clause (9), the credit must be allocated based on the ratio of federal
2.6adjusted gross income reduced by the earned income not subject to tax under this chapter
2.7over federal adjusted gross income. For purposes of this paragraph, the subtractions
2.8for military pay under section290.01, subdivision 19b , clauses (10) and (11), are not
2.9considered "earned income not subject to tax under this chapter."
2.10For the purposes of this paragraph, the exclusion of combat pay under section 112
2.11of the Internal Revenue Code is not considered "earned income not subject to tax under
2.12this chapter."
2.13(g) For tax years beginning after December 31, 2007, and before December 31, 2010,
2.14and for tax years beginning after December 31, 2017, the$5,770 $8,620 in paragraph
2.15(b), the$15,080 $22,560 in paragraph (c), and the $17,890 $26,620 in paragraph (d),
2.16after being adjusted for inflation under subdivision 7, are each increased by $3,000 for
2.17married taxpayers filing joint returns. For tax years beginning after December 31, 2008,
2.18the commissioner shall annually adjust the $3,000 by the percentage determined pursuant
2.19to the provisions of section 1(f) of the Internal Revenue Code, except that in section
2.201(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009, the
2.21commissioner shall then determine the percent change from the 12 months ending on
2.22August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent
2.23year, from the 12 months ending on August 31, 2007, to the 12 months ending on August
2.2431 of the year preceding the taxable year. The earned income thresholds as adjusted
2.25for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount
2.26is rounded up to the nearest $10. The determination of the commissioner under this
2.27subdivision is not a rule under the Administrative Procedure Act.
2.28(h) For tax years beginning after December 31, 2010, and before January 1, 2012, and
2.29for tax years beginning after December 31, 2013, and before January 1, 2018, the$5,770
2.30 $8,620 in paragraph (b), the$15,080 $22,560 in paragraph (c), and the $17,890 $26,620 in
2.31paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
2.32$5,000 for married taxpayers filing joint returns. For tax years beginning after December
2.3331, 2010, and before January 1, 2012, and for tax years beginning after December 31,
2.342013, and before January 1, 2018, the commissioner shall annually adjust the $5,000
2.35by the percentage determined pursuant to the provisions of section 1(f) of the Internal
2.36Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for
3.1the word "1992." For 2011, the commissioner shall then determine the percent change
3.2from the 12 months ending on August 31, 2008, to the 12 months ending on August 31,
3.32010, and in each subsequent year, from the 12 months ending on August 31, 2008, to
3.4the 12 months ending on August 31 of the year preceding the taxable year. The earned
3.5income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
3.6amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
3.7commissioner under this subdivision is not a rule under the Administrative Procedure Act.
3.8(i) The commissioner shall construct tables showing the amount of the credit at
3.9various income levels and make them available to taxpayers. The tables shall follow
3.10the schedule contained in this subdivision, except that the commissioner may graduate
3.11the transition between income brackets.
3.12EFFECTIVE DATE.This section is effective for taxable years beginning after
3.13December 31, 2013.
3.14 Sec. 2. Minnesota Statutes 2012, section 290.0671, subdivision 7, is amended to read:
3.15 Subd. 7. Inflation adjustment. The earned income amounts used to calculate
3.16the credit and the income thresholds at which the maximum credit begins to be reduced
3.17in subdivision 1 must be adjusted for inflation. The commissioner shall adjust by the
3.18percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue
3.19Code, except that in section 1(f)(3)(B) the word"1999" "2013" shall be substituted for
3.20the word "1992." For2001 2015, the commissioner shall then determine the percent
3.21change from the 12 months ending on August 31,1999 2013, to the 12 months ending
3.22on August 31,2000 2014, and in each subsequent year, from the 12 months ending on
3.23August 31,1999 2013, to the 12 months ending on August 31 of the year preceding the
3.24taxable year. The earned income thresholds as adjusted for inflation must be rounded to
3.25the nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest
3.26$10 amount. The determination of the commissioner under this subdivision is not a rule
3.27under the Administrative Procedure Act.
3.28EFFECTIVE DATE.This section is effective for taxable years beginning after
3.29December 31, 2013.
1.3phaseout for married filers to conform to the Internal Revenue Code; increasing
1.4the maximum allowed credit;amending Minnesota Statutes 2012, section
1.5290.0671, subdivisions 1, 7.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 290.0671, subdivision 1, is amended to read:
1.8 Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax
1.9imposed by this chapter equal to a percentage of earned income. To receive a credit, a
1.10taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
1.11(b) For individuals with no qualifying children, the credit equals
1.12of the first
1.13of earned income or adjusted gross income, whichever is greater, in excess of
1.14 $8,620, but in no case is the credit less than zero.
1.15(c) For individuals with one qualifying child, the credit equals
1.16the first
1.17
1.18adjusted gross income, whichever is greater, in excess of
1.19case is the credit less than zero.
1.20(d) For individuals with two or more qualifying children, the credit equals
1.21 percent of the first
1.22
1.23income or adjusted gross income, whichever is greater, in excess of
1.24but in no case is the credit less than zero.
2.1(e) For a nonresident or part-year resident, the credit must be allocated based on the
2.2percentage calculated under section
2.3(f) For a person who was a resident for the entire tax year and has earned income
2.4not subject to tax under this chapter, including income excluded under section
2.5subdivision 19b
2.6adjusted gross income reduced by the earned income not subject to tax under this chapter
2.7over federal adjusted gross income. For purposes of this paragraph, the subtractions
2.8for military pay under section
2.9considered "earned income not subject to tax under this chapter."
2.10For the purposes of this paragraph, the exclusion of combat pay under section 112
2.11of the Internal Revenue Code is not considered "earned income not subject to tax under
2.12this chapter."
2.13(g) For tax years beginning after December 31, 2007, and before December 31, 2010,
2.14and for tax years beginning after December 31, 2017, the
2.15(b), the
2.16after being adjusted for inflation under subdivision 7, are each increased by $3,000 for
2.17married taxpayers filing joint returns. For tax years beginning after December 31, 2008,
2.18the commissioner shall annually adjust the $3,000 by the percentage determined pursuant
2.19to the provisions of section 1(f) of the Internal Revenue Code, except that in section
2.201(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009, the
2.21commissioner shall then determine the percent change from the 12 months ending on
2.22August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent
2.23year, from the 12 months ending on August 31, 2007, to the 12 months ending on August
2.2431 of the year preceding the taxable year. The earned income thresholds as adjusted
2.25for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount
2.26is rounded up to the nearest $10. The determination of the commissioner under this
2.27subdivision is not a rule under the Administrative Procedure Act.
2.28(h) For tax years beginning after December 31, 2010, and before January 1, 2012, and
2.29for tax years beginning after December 31, 2013, and before January 1, 2018, the
2.30 $8,620 in paragraph (b), the
2.31paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
2.32$5,000 for married taxpayers filing joint returns. For tax years beginning after December
2.3331, 2010, and before January 1, 2012, and for tax years beginning after December 31,
2.342013, and before January 1, 2018, the commissioner shall annually adjust the $5,000
2.35by the percentage determined pursuant to the provisions of section 1(f) of the Internal
2.36Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for
3.1the word "1992." For 2011, the commissioner shall then determine the percent change
3.2from the 12 months ending on August 31, 2008, to the 12 months ending on August 31,
3.32010, and in each subsequent year, from the 12 months ending on August 31, 2008, to
3.4the 12 months ending on August 31 of the year preceding the taxable year. The earned
3.5income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
3.6amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
3.7commissioner under this subdivision is not a rule under the Administrative Procedure Act.
3.8(i) The commissioner shall construct tables showing the amount of the credit at
3.9various income levels and make them available to taxpayers. The tables shall follow
3.10the schedule contained in this subdivision, except that the commissioner may graduate
3.11the transition between income brackets.
3.12EFFECTIVE DATE.This section is effective for taxable years beginning after
3.13December 31, 2013.
3.14 Sec. 2. Minnesota Statutes 2012, section 290.0671, subdivision 7, is amended to read:
3.15 Subd. 7. Inflation adjustment. The earned income amounts used to calculate
3.16the credit and the income thresholds at which the maximum credit begins to be reduced
3.17in subdivision 1 must be adjusted for inflation. The commissioner shall adjust by the
3.18percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue
3.19Code, except that in section 1(f)(3)(B) the word
3.20the word "1992." For
3.21change from the 12 months ending on August 31,
3.22on August 31,
3.23August 31,
3.24taxable year. The earned income thresholds as adjusted for inflation must be rounded to
3.25the nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest
3.26$10 amount. The determination of the commissioner under this subdivision is not a rule
3.27under the Administrative Procedure Act.
3.28EFFECTIVE DATE.This section is effective for taxable years beginning after
3.29December 31, 2013.
