Bill Text: MN SF847 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Prekindergarten expenditures income tax subtraction authorization
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced - Dead) 2014-05-01 - Withdrawn and returned to author [SF847 Detail]
Download: Minnesota-2013-SF847-Introduced.html
1.2relating to taxation; individual income; providing that the education expense
1.3credit and deduction apply to certain expenditures for prekindergarten expenses;
1.4amending Minnesota Statutes 2012, sections 290.01, subdivision 19b; 290.0674,
1.5subdivision 1.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 290.01, subdivision 19b, is 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 , and amounts used to claim the credit under section 290.067, not to
1.18exceed $1,625 for each qualifying child ingrades a prekindergarten educational program
1.19or in kindergartento through grade 6 and $2,500 for each qualifying child in grades 7 to
1.2012, for tuition, textbooks, and transportation of each qualifying child in attending an
1.21elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
1.22or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
1.23attendance laws, which is not operated for profit, and which adheres to the provisions of
1.24the Civil Rights Act of 1964 and chapter 363A, or for fees charged for enrollment in a
1.25prekindergarten educational program. For the purposes of this clause, "tuition" includes
2.1fees or tuition as defined in section290.0674, subdivision 1 , clause (1). As used in this
2.2clause, "prekindergarten educational program" means:
2.3(i) prekindergarten programs established by a school district under chapter 124D;
2.4(ii) preschools, nursery schools, and early childhood development programs licensed
2.5by the Department of Human Services and accredited by the National Association for the
2.6Education of Young Children or National Early Childhood Program Accreditation;
2.7(iii) Montessori programs affiliated with or accredited by the American Montessori
2.8Society or American Montessori International; and
2.9(iv) child care programs provided by family day care providers holding a current
2.10early childhood development credential approved by the commissioner of human services.
2.11 As used in this clause, "textbooks" includes books and other instructional materials
2.12and equipment purchased or leased for use in elementary and secondary schools in teaching
2.13only those subjects legally and commonly taught in public elementary and secondary
2.14schools in this state. Equipment expenses qualifying for deduction includes expenses as
2.15defined and limited in section290.0674, subdivision 1 , clause (3). "Textbooks" does
2.16not include instructional books and materials used in the teaching of religious tenets,
2.17doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship,
2.18nor does it include books or materials for, or transportation to, extracurricular activities
2.19including sporting events, musical or dramatic events, speech activities, driver's education,
2.20or similar programs. No deduction is permitted for any expense the taxpayer incurred in
2.21using the taxpayer's or the qualifying child's vehicle to provide such transportation for
2.22a qualifying child. For purposes of the subtraction provided by this clause, "qualifying
2.23child" has the meaning given in section 32(c)(3) of the Internal Revenue Code;
2.24 (4) income as provided under section290.0802 ;
2.25 (5) to the extent included in federal adjusted gross income, income realized on
2.26disposition of property exempt from tax under section290.491 ;
2.27 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
2.28of the Internal Revenue Code in determining federal taxable income by an individual
2.29who does not itemize deductions for federal income tax purposes for the taxable year, an
2.30amount equal to 50 percent of the excess of charitable contributions over $500 allowable
2.31as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
2.32under the provisions of Public Law 109-1 and Public Law 111-126;
2.33 (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
2.34qualify for a credit under section290.06, subdivision 22 , an amount equal to the carryover
2.35of subnational foreign taxes for the taxable year, but not to exceed the total subnational
2.36foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
3.1"federal foreign tax credit" means the credit allowed under section 27 of the Internal
3.2Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
3.3under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
3.4the extent they exceed the federal foreign tax credit;
3.5 (8) in each of the five tax years immediately following the tax year in which an
3.6addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case of a
3.7shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
3.8delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
3.9of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
3.10clause (15), in the case of a shareholder of an S corporation, minus the positive value of
3.11any net operating loss under section 172 of the Internal Revenue Code generated for the
3.12tax year of the addition. The resulting delayed depreciation cannot be less than zero;
3.13 (9) job opportunity building zone income as provided under section469.316 ;
3.14 (10) to the extent included in federal taxable income, the amount of compensation
3.15paid to members of the Minnesota National Guard or other reserve components of the
3.16United States military for active service, excluding compensation for services performed
3.17under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
3.18service" means (i) state active service as defined in section190.05, subdivision 5a , clause
3.19(1); or (ii) federally funded state active service as defined in section190.05, subdivision
3.205b , but "active service" excludes service performed in accordance with section
190.08,
3.21subdivision 3 ;
3.22 (11) to the extent included in federal taxable income, the amount of compensation
3.23paid to Minnesota residents who are members of the armed forces of the United States
3.24or United Nations for active duty performed under United States Code, title 10; or the
3.25authority of the United Nations;
3.26 (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
3.27qualified donor's donation, while living, of one or more of the qualified donor's organs
3.28to another person for human organ transplantation. For purposes of this clause, "organ"
3.29means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
3.30"human organ transplantation" means the medical procedure by which transfer of a human
3.31organ is made from the body of one person to the body of another person; "qualified
3.32expenses" means unreimbursed expenses for both the individual and the qualified donor
3.33for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
3.34may be subtracted under this clause only once; and "qualified donor" means the individual
3.35or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
4.1individual may claim the subtraction in this clause for each instance of organ donation for
4.2transplantation during the taxable year in which the qualified expenses occur;
4.3 (13) in each of the five tax years immediately following the tax year in which an
4.4addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
4.5shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
4.6addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
4.7case of a shareholder of a corporation that is an S corporation, minus the positive value of
4.8any net operating loss under section 172 of the Internal Revenue Code generated for the
4.9tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
4.10subtraction is not allowed under this clause;
4.11 (14) to the extent included in the federal taxable income of a nonresident of
4.12Minnesota, compensation paid to a service member as defined in United States Code, title
4.1310, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
4.14Act, Public Law 108-189, section 101(2);
4.15 (15) to the extent included in federal taxable income, the amount of national service
4.16educational awards received from the National Service Trust under United States Code,
4.17title 42, sections 12601 to 12604, for service in an approved Americorps National Service
4.18program;
4.19(16) to the extent included in federal taxable income, discharge of indebtedness
4.20income resulting from reacquisition of business indebtedness included in federal taxable
4.21income under section 108(i) of the Internal Revenue Code. This subtraction applies only
4.22to the extent that the income was included in net income in a prior year as a result of the
4.23addition under section290.01, subdivision 19a , clause (16); and
4.24(17) the amount of the net operating loss allowed under section290.095, subdivision
4.2511 , paragraph (c).
4.26EFFECTIVE DATE.This section is effective for taxable years beginning after
4.27December 31, 2012.
4.28 Sec. 2. Minnesota Statutes 2012, section 290.0674, subdivision 1, is amended to read:
4.29 Subdivision 1. Credit allowed. An individual is allowed a credit against the
4.30tax imposed by this chapter in an amount equal to 75 percent of the amount paid for
4.31education-related expenses for a qualifying child in a prekindergarten educational program
4.32or in kindergarten through grade 12. For purposes of this section, "education-related
4.33expenses" means:
4.34(1) fees or tuition for instruction by an instructor under section120A.22, subdivision
4.3510 , clause (1), (2), (3), (4), or (5), or a member of the Minnesota Music Teachers
5.1Association, and who is not a lineal ancestor or sibling of the dependent for instruction
5.2outside the regular school day or school year, including tutoring, driver's education
5.3offered as part of school curriculum, regardless of whether it is taken from a public or
5.4private entity or summer camps, in grade or age appropriate curricula that supplement
5.5curricula and instruction available during the regular school year, that assists a dependent
5.6to improve knowledge of core curriculum areas or to expand knowledge and skills under
5.7the required academic standards under section120B.021, subdivision 1 , and the elective
5.8standard under section120B.022, subdivision 1 , clause (2), and that do not include the
5.9teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
5.10tenets, doctrines, or worship, and fees for enrollment in a prekindergarten educational
5.11program as defined in section 290.01, subdivision 19b, to the extent not used to claim
5.12the credit under section 290.067;
5.13(2) expenses for textbooks, including books and other instructional materials and
5.14equipment purchased or leased for use in elementary and secondary schools in teaching
5.15only those subjects legally and commonly taught in public elementary and secondary
5.16schools in this state. "Textbooks" does not include instructional books and materials
5.17used in the teaching of religious tenets, doctrines, or worship, the purpose of which is
5.18to instill such tenets, doctrines, or worship, nor does it include books or materials for
5.19extracurricular activities including sporting events, musical or dramatic events, speech
5.20activities, driver's education, or similar programs;
5.21(3) a maximum expense of $200 per family for personal computer hardware,
5.22excluding single purpose processors, and educational software that assists a dependent to
5.23improve knowledge of core curriculum areas or to expand knowledge and skills under
5.24the required academic standards under section120B.021, subdivision 1 , and the elective
5.25standard under section120B.022, subdivision 1 , clause (2), purchased for use in the
5.26taxpayer's home and not used in a trade or business regardless of whether the computer is
5.27required by the dependent's school; and
5.28(4) the amount paid to others for transportation of a qualifying child attending an
5.29elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
5.30or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
5.31attendance laws, which is not operated for profit, and which adheres to the provisions of
5.32the Civil Rights Act of 1964 and chapter 363A.
5.33For purposes of this section, "qualifying child" has the meaning given in section
5.3432(c)(3) of the Internal Revenue Code.
5.35EFFECTIVE DATE.This section is effective for taxable years beginning after
5.36December 31, 2012.
1.3credit and deduction apply to certain expenditures for prekindergarten expenses;
1.4amending Minnesota Statutes 2012, sections 290.01, subdivision 19b; 290.0674,
1.5subdivision 1.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 290.01, subdivision 19b, is 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
1.18exceed $1,625 for each qualifying child in
1.19or in kindergarten
1.2012, for tuition, textbooks, and transportation of each qualifying child in attending an
1.21elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
1.22or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
1.23attendance laws, which is not operated for profit, and which adheres to the provisions of
1.24the Civil Rights Act of 1964 and chapter 363A, or for fees charged for enrollment in a
1.25prekindergarten educational program. For the purposes of this clause, "tuition" includes
2.1fees or tuition as defined in section
2.2clause, "prekindergarten educational program" means:
2.3(i) prekindergarten programs established by a school district under chapter 124D;
2.4(ii) preschools, nursery schools, and early childhood development programs licensed
2.5by the Department of Human Services and accredited by the National Association for the
2.6Education of Young Children or National Early Childhood Program Accreditation;
2.7(iii) Montessori programs affiliated with or accredited by the American Montessori
2.8Society or American Montessori International; and
2.9(iv) child care programs provided by family day care providers holding a current
2.10early childhood development credential approved by the commissioner of human services.
2.11 As used in this clause, "textbooks" includes books and other instructional materials
2.12and equipment purchased or leased for use in elementary and secondary schools in teaching
2.13only those subjects legally and commonly taught in public elementary and secondary
2.14schools in this state. Equipment expenses qualifying for deduction includes expenses as
2.15defined and limited in section
2.16not include instructional books and materials used in the teaching of religious tenets,
2.17doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship,
2.18nor does it include books or materials for, or transportation to, extracurricular activities
2.19including sporting events, musical or dramatic events, speech activities, driver's education,
2.20or similar programs. No deduction is permitted for any expense the taxpayer incurred in
2.21using the taxpayer's or the qualifying child's vehicle to provide such transportation for
2.22a qualifying child. For purposes of the subtraction provided by this clause, "qualifying
2.23child" has the meaning given in section 32(c)(3) of the Internal Revenue Code;
2.24 (4) income as provided under section
2.25 (5) to the extent included in federal adjusted gross income, income realized on
2.26disposition of property exempt from tax under section
2.27 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
2.28of the Internal Revenue Code in determining federal taxable income by an individual
2.29who does not itemize deductions for federal income tax purposes for the taxable year, an
2.30amount equal to 50 percent of the excess of charitable contributions over $500 allowable
2.31as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
2.32under the provisions of Public Law 109-1 and Public Law 111-126;
2.33 (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
2.34qualify for a credit under section
2.35of subnational foreign taxes for the taxable year, but not to exceed the total subnational
2.36foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
3.1"federal foreign tax credit" means the credit allowed under section 27 of the Internal
3.2Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
3.3under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
3.4the extent they exceed the federal foreign tax credit;
3.5 (8) in each of the five tax years immediately following the tax year in which an
3.6addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case of a
3.7shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
3.8delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
3.9of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
3.10clause (15), in the case of a shareholder of an S corporation, minus the positive value of
3.11any net operating loss under section 172 of the Internal Revenue Code generated for the
3.12tax year of the addition. The resulting delayed depreciation cannot be less than zero;
3.13 (9) job opportunity building zone income as provided under section
3.14 (10) to the extent included in federal taxable income, the amount of compensation
3.15paid to members of the Minnesota National Guard or other reserve components of the
3.16United States military for active service, excluding compensation for services performed
3.17under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
3.18service" means (i) state active service as defined in section
3.19(1); or (ii) federally funded state active service as defined in section
3.205b
3.21subdivision 3
3.22 (11) to the extent included in federal taxable income, the amount of compensation
3.23paid to Minnesota residents who are members of the armed forces of the United States
3.24or United Nations for active duty performed under United States Code, title 10; or the
3.25authority of the United Nations;
3.26 (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
3.27qualified donor's donation, while living, of one or more of the qualified donor's organs
3.28to another person for human organ transplantation. For purposes of this clause, "organ"
3.29means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
3.30"human organ transplantation" means the medical procedure by which transfer of a human
3.31organ is made from the body of one person to the body of another person; "qualified
3.32expenses" means unreimbursed expenses for both the individual and the qualified donor
3.33for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
3.34may be subtracted under this clause only once; and "qualified donor" means the individual
3.35or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
4.1individual may claim the subtraction in this clause for each instance of organ donation for
4.2transplantation during the taxable year in which the qualified expenses occur;
4.3 (13) in each of the five tax years immediately following the tax year in which an
4.4addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
4.5shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
4.6addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
4.7case of a shareholder of a corporation that is an S corporation, minus the positive value of
4.8any net operating loss under section 172 of the Internal Revenue Code generated for the
4.9tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
4.10subtraction is not allowed under this clause;
4.11 (14) to the extent included in the federal taxable income of a nonresident of
4.12Minnesota, compensation paid to a service member as defined in United States Code, title
4.1310, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
4.14Act, Public Law 108-189, section 101(2);
4.15 (15) to the extent included in federal taxable income, the amount of national service
4.16educational awards received from the National Service Trust under United States Code,
4.17title 42, sections 12601 to 12604, for service in an approved Americorps National Service
4.18program;
4.19(16) to the extent included in federal taxable income, discharge of indebtedness
4.20income resulting from reacquisition of business indebtedness included in federal taxable
4.21income under section 108(i) of the Internal Revenue Code. This subtraction applies only
4.22to the extent that the income was included in net income in a prior year as a result of the
4.23addition under section
4.24(17) the amount of the net operating loss allowed under section
4.2511
4.26EFFECTIVE DATE.This section is effective for taxable years beginning after
4.27December 31, 2012.
4.28 Sec. 2. Minnesota Statutes 2012, section 290.0674, subdivision 1, is amended to read:
4.29 Subdivision 1. Credit allowed. An individual is allowed a credit against the
4.30tax imposed by this chapter in an amount equal to 75 percent of the amount paid for
4.31education-related expenses for a qualifying child in a prekindergarten educational program
4.32or in kindergarten through grade 12. For purposes of this section, "education-related
4.33expenses" means:
4.34(1) fees or tuition for instruction by an instructor under section
4.3510
5.1Association, and who is not a lineal ancestor or sibling of the dependent for instruction
5.2outside the regular school day or school year, including tutoring, driver's education
5.3offered as part of school curriculum, regardless of whether it is taken from a public or
5.4private entity or summer camps, in grade or age appropriate curricula that supplement
5.5curricula and instruction available during the regular school year, that assists a dependent
5.6to improve knowledge of core curriculum areas or to expand knowledge and skills under
5.7the required academic standards under section
5.8standard under section
5.9teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
5.10tenets, doctrines, or worship, and fees for enrollment in a prekindergarten educational
5.11program as defined in section 290.01, subdivision 19b, to the extent not used to claim
5.12the credit under section 290.067;
5.13(2) expenses for textbooks, including books and other instructional materials and
5.14equipment purchased or leased for use in elementary and secondary schools in teaching
5.15only those subjects legally and commonly taught in public elementary and secondary
5.16schools in this state. "Textbooks" does not include instructional books and materials
5.17used in the teaching of religious tenets, doctrines, or worship, the purpose of which is
5.18to instill such tenets, doctrines, or worship, nor does it include books or materials for
5.19extracurricular activities including sporting events, musical or dramatic events, speech
5.20activities, driver's education, or similar programs;
5.21(3) a maximum expense of $200 per family for personal computer hardware,
5.22excluding single purpose processors, and educational software that assists a dependent to
5.23improve knowledge of core curriculum areas or to expand knowledge and skills under
5.24the required academic standards under section
5.25standard under section
5.26taxpayer's home and not used in a trade or business regardless of whether the computer is
5.27required by the dependent's school; and
5.28(4) the amount paid to others for transportation of a qualifying child attending an
5.29elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
5.30or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
5.31attendance laws, which is not operated for profit, and which adheres to the provisions of
5.32the Civil Rights Act of 1964 and chapter 363A.
5.33For purposes of this section, "qualifying child" has the meaning given in section
5.3432(c)(3) of the Internal Revenue Code.
5.35EFFECTIVE DATE.This section is effective for taxable years beginning after
5.36December 31, 2012.
