Bill Text: MN SF2475 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Medical care and health insurance expenditures income tax subtraction authorization
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-03-15 - Referred to Taxes [SF2475 Detail]
Download: Minnesota-2011-SF2475-Introduced.html
1.2relating to taxation; individual income; allowing a subtraction for certain
1.3expenditures for medical care and health insurance;amending Minnesota Statutes
1.42011 Supplement, section 290.01, subdivision 19b.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2011 Supplement, section 290.01, subdivision 19b,
1.7is amended to read:
1.8 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
1.9and trusts, there shall be subtracted from federal taxable income:
1.10 (1) net interest income on obligations of any authority, commission, or
1.11instrumentality of the United States to the extent includable in taxable income for federal
1.12income tax purposes but exempt from state income tax under the laws of the United States;
1.13 (2) if included in federal taxable income, the amount of any overpayment of income
1.14tax to Minnesota or to any other state, for any previous taxable year, whether the amount
1.15is received as a refund or as a credit to another taxable year's income tax liability;
1.16 (3) the amount paid to others, less the amount used to claim the credit allowed under
1.17section290.0674 , not to exceed $1,625 for each qualifying child in grades kindergarten
1.18to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
1.19transportation of each qualifying child in attending an elementary or secondary school
1.20situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
1.21resident of this state may legally fulfill the state's compulsory attendance laws, which
1.22is not operated for profit, and which adheres to the provisions of the Civil Rights Act
1.23of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
1.24tuition as defined in section290.0674, subdivision 1 , clause (1). As used in this clause,
2.1"textbooks" includes books and other instructional materials and equipment purchased
2.2or leased for use in elementary and secondary schools in teaching only those subjects
2.3legally and commonly taught in public elementary and secondary schools in this state.
2.4Equipment expenses qualifying for deduction includes expenses as defined and limited in
2.5section290.0674, subdivision 1 , clause (3). "Textbooks" does not include instructional
2.6books and materials used in the teaching of religious tenets, doctrines, or worship, the
2.7purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
2.8or materials for, or transportation to, extracurricular activities including sporting events,
2.9musical or dramatic events, speech activities, driver's education, or similar programs. No
2.10deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
2.11the qualifying child's vehicle to provide such transportation for a qualifying child. For
2.12purposes of the subtraction provided by this clause, "qualifying child" has the meaning
2.13given in section 32(c)(3) of the Internal Revenue Code;
2.14 (4) income as provided under section290.0802 ;
2.15 (5) to the extent included in federal adjusted gross income, income realized on
2.16disposition of property exempt from tax under section290.491 ;
2.17 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
2.18of the Internal Revenue Code in determining federal taxable income by an individual
2.19who does not itemize deductions for federal income tax purposes for the taxable year, an
2.20amount equal to 50 percent of the excess of charitable contributions over $500 allowable
2.21as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
2.22under the provisions of Public Law 109-1 and Public Law 111-126;
2.23 (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
2.24qualify for a credit under section290.06, subdivision 22 , an amount equal to the carryover
2.25of subnational foreign taxes for the taxable year, but not to exceed the total subnational
2.26foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
2.27"federal foreign tax credit" means the credit allowed under section 27 of the Internal
2.28Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
2.29under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
2.30the extent they exceed the federal foreign tax credit;
2.31 (8) in each of the five tax years immediately following the tax year in which an
2.32addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
2.33of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
2.34of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
2.35the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
2.36subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
3.1positive value of any net operating loss under section 172 of the Internal Revenue Code
3.2generated for the tax year of the addition. The resulting delayed depreciation cannot be
3.3less than zero;
3.4 (9) job opportunity building zone income as provided under section469.316 ;
3.5 (10) to the extent included in federal taxable income, the amount of compensation
3.6paid to members of the Minnesota National Guard or other reserve components of the
3.7United States military for active service, excluding compensation for services performed
3.8under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
3.9service" means (i) state active service as defined in section190.05, subdivision 5a , clause
3.10(1); or (ii) federally funded state active service as defined in section190.05, subdivision
3.115b , but "active service" excludes service performed in accordance with section
190.08,
3.12subdivision 3 ;
3.13 (11) to the extent included in federal taxable income, the amount of compensation
3.14paid to Minnesota residents who are members of the armed forces of the United States
3.15or United Nations for active duty performed under United States Code, title 10; or the
3.16authority of the United Nations;
3.17 (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
3.18qualified donor's donation, while living, of one or more of the qualified donor's organs
3.19to another person for human organ transplantation. For purposes of this clause, "organ"
3.20means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
3.21"human organ transplantation" means the medical procedure by which transfer of a human
3.22organ is made from the body of one person to the body of another person; "qualified
3.23expenses" means unreimbursed expenses for both the individual and the qualified donor
3.24for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
3.25may be subtracted under this clause only once; and "qualified donor" means the individual
3.26or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
3.27individual may claim the subtraction in this clause for each instance of organ donation for
3.28transplantation during the taxable year in which the qualified expenses occur;
3.29 (13) in each of the five tax years immediately following the tax year in which an
3.30addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
3.31shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
3.32addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
3.33case of a shareholder of a corporation that is an S corporation, minus the positive value of
3.34any net operating loss under section 172 of the Internal Revenue Code generated for the
3.35tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
3.36subtraction is not allowed under this clause;
4.1 (14) to the extent included in the federal taxable income of a nonresident of
4.2Minnesota, compensation paid to a service member as defined in United States Code, title
4.310, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
4.4Act, Public Law 108-189, section 101(2);
4.5 (15) international economic development zone income as provided under section
4.6469.325
;
4.7 (16) to the extent included in federal taxable income, the amount of national service
4.8educational awards received from the National Service Trust under United States Code,
4.9title 42, sections 12601 to 12604, for service in an approved Americorps National Service
4.10program;
4.11(17) to the extent included in federal taxable income, discharge of indebtedness
4.12income resulting from reacquisition of business indebtedness included in federal taxable
4.13income under section 108(i) of the Internal Revenue Code. This subtraction applies only
4.14to the extent that the income was included in net income in a prior year as a result of the
4.15addition under section290.01, subdivision 19a , clause (16); and
4.16(18) the amount of the net operating loss allowed under section290.095, subdivision
4.1711, paragraph (c).; and
4.18(19) amounts paid during the taxable year for medical care, as defined in section
4.19213(d) of the Internal Revenue Code, except these amounts do not include any amounts
4.20(i) deducted in computing or otherwise excluded from federal taxable income including
4.21amounts compensated by insurance or paid or reimbursed by an employer or a plan under
4.22sections 104 (health care reimbursement accounts), 105 (accident and health plans), 125
4.23(cafeteria and flexible spending accounts), 223 (health care savings accounts), or other
4.24similar provisions of the Internal Revenue Code, or (ii) used to compute the credit under
4.25section 290.0672.
4.26EFFECTIVE DATE.This section is effective for taxable years beginning after
4.27December 31, 2011.
1.3expenditures for medical care and health insurance;amending Minnesota Statutes
1.42011 Supplement, section 290.01, subdivision 19b.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2011 Supplement, section 290.01, subdivision 19b,
1.7is amended to read:
1.8 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
1.9and trusts, there shall be subtracted from federal taxable income:
1.10 (1) net interest income on obligations of any authority, commission, or
1.11instrumentality of the United States to the extent includable in taxable income for federal
1.12income tax purposes but exempt from state income tax under the laws of the United States;
1.13 (2) if included in federal taxable income, the amount of any overpayment of income
1.14tax to Minnesota or to any other state, for any previous taxable year, whether the amount
1.15is received as a refund or as a credit to another taxable year's income tax liability;
1.16 (3) the amount paid to others, less the amount used to claim the credit allowed under
1.17section
1.18to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
1.19transportation of each qualifying child in attending an elementary or secondary school
1.20situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
1.21resident of this state may legally fulfill the state's compulsory attendance laws, which
1.22is not operated for profit, and which adheres to the provisions of the Civil Rights Act
1.23of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
1.24tuition as defined in section
2.1"textbooks" includes books and other instructional materials and equipment purchased
2.2or leased for use in elementary and secondary schools in teaching only those subjects
2.3legally and commonly taught in public elementary and secondary schools in this state.
2.4Equipment expenses qualifying for deduction includes expenses as defined and limited in
2.5section
2.6books and materials used in the teaching of religious tenets, doctrines, or worship, the
2.7purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
2.8or materials for, or transportation to, extracurricular activities including sporting events,
2.9musical or dramatic events, speech activities, driver's education, or similar programs. No
2.10deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
2.11the qualifying child's vehicle to provide such transportation for a qualifying child. For
2.12purposes of the subtraction provided by this clause, "qualifying child" has the meaning
2.13given in section 32(c)(3) of the Internal Revenue Code;
2.14 (4) income as provided under section
2.15 (5) to the extent included in federal adjusted gross income, income realized on
2.16disposition of property exempt from tax under section
2.17 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
2.18of the Internal Revenue Code in determining federal taxable income by an individual
2.19who does not itemize deductions for federal income tax purposes for the taxable year, an
2.20amount equal to 50 percent of the excess of charitable contributions over $500 allowable
2.21as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
2.22under the provisions of Public Law 109-1 and Public Law 111-126;
2.23 (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
2.24qualify for a credit under section
2.25of subnational foreign taxes for the taxable year, but not to exceed the total subnational
2.26foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
2.27"federal foreign tax credit" means the credit allowed under section 27 of the Internal
2.28Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
2.29under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
2.30the extent they exceed the federal foreign tax credit;
2.31 (8) in each of the five tax years immediately following the tax year in which an
2.32addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
2.33of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
2.34of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
2.35the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
2.36subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
3.1positive value of any net operating loss under section 172 of the Internal Revenue Code
3.2generated for the tax year of the addition. The resulting delayed depreciation cannot be
3.3less than zero;
3.4 (9) job opportunity building zone income as provided under section
3.5 (10) to the extent included in federal taxable income, the amount of compensation
3.6paid to members of the Minnesota National Guard or other reserve components of the
3.7United States military for active service, excluding compensation for services performed
3.8under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
3.9service" means (i) state active service as defined in section
3.10(1); or (ii) federally funded state active service as defined in section
3.115b
3.12subdivision 3
3.13 (11) to the extent included in federal taxable income, the amount of compensation
3.14paid to Minnesota residents who are members of the armed forces of the United States
3.15or United Nations for active duty performed under United States Code, title 10; or the
3.16authority of the United Nations;
3.17 (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
3.18qualified donor's donation, while living, of one or more of the qualified donor's organs
3.19to another person for human organ transplantation. For purposes of this clause, "organ"
3.20means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
3.21"human organ transplantation" means the medical procedure by which transfer of a human
3.22organ is made from the body of one person to the body of another person; "qualified
3.23expenses" means unreimbursed expenses for both the individual and the qualified donor
3.24for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
3.25may be subtracted under this clause only once; and "qualified donor" means the individual
3.26or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
3.27individual may claim the subtraction in this clause for each instance of organ donation for
3.28transplantation during the taxable year in which the qualified expenses occur;
3.29 (13) in each of the five tax years immediately following the tax year in which an
3.30addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
3.31shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
3.32addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
3.33case of a shareholder of a corporation that is an S corporation, minus the positive value of
3.34any net operating loss under section 172 of the Internal Revenue Code generated for the
3.35tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
3.36subtraction is not allowed under this clause;
4.1 (14) to the extent included in the federal taxable income of a nonresident of
4.2Minnesota, compensation paid to a service member as defined in United States Code, title
4.310, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
4.4Act, Public Law 108-189, section 101(2);
4.5 (15) international economic development zone income as provided under section
4.7 (16) to the extent included in federal taxable income, the amount of national service
4.8educational awards received from the National Service Trust under United States Code,
4.9title 42, sections 12601 to 12604, for service in an approved Americorps National Service
4.10program;
4.11(17) to the extent included in federal taxable income, discharge of indebtedness
4.12income resulting from reacquisition of business indebtedness included in federal taxable
4.13income under section 108(i) of the Internal Revenue Code. This subtraction applies only
4.14to the extent that the income was included in net income in a prior year as a result of the
4.15addition under section
4.16(18) the amount of the net operating loss allowed under section
4.18(19) amounts paid during the taxable year for medical care, as defined in section
4.19213(d) of the Internal Revenue Code, except these amounts do not include any amounts
4.20(i) deducted in computing or otherwise excluded from federal taxable income including
4.21amounts compensated by insurance or paid or reimbursed by an employer or a plan under
4.22sections 104 (health care reimbursement accounts), 105 (accident and health plans), 125
4.23(cafeteria and flexible spending accounts), 223 (health care savings accounts), or other
4.24similar provisions of the Internal Revenue Code, or (ii) used to compute the credit under
4.25section 290.0672.
4.26EFFECTIVE DATE.This section is effective for taxable years beginning after
4.27December 31, 2011.
