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S.F. No. 484 - Veterans Jobs Tax Credit
 
Author: Senator Michael P. Goggin
 
Prepared By: Senate Counsel, Research and Fiscal Analysis (651/296-4791)
 
Date: February 16, 2017



 

Section 1, subdivision 1.  [Definitions] Defines the following terms:

“Qualified employee” means an employee as defined under section 290.92, subdivision 1 (generally, a person who provides services for an employer, and the performance of whose services establish and constitute an employer-employee relationship).  The employee must be a Minnesota resident on the date of hire and be paid wages that are attributable to Minnesota. A qualified employee does not include:

  • an individual who is an immediate family member of the employer;
  • an individual who owns more than 50 percent of the value of outstanding stock of the employer corporation, or, if the employer is not a corporation, an individual who owns more than 50 percent of the capital and profit interests in the entity; or
  • if the employer is an estate or trust, any individual who is a family member or household member of a grantor, beneficiary, or fiduciary of the estate or trust. 

“Qualified employer” means an employer that hires, as a qualified employee, a 9/11 veteran, disabled veteran, or an unemployed veteran.

“Disabled veteran” means a veteran with a service-connected disability rating by the United States Veterans Administration or by the retirement board of one of the armed services branches.

“Unemployed veteran” means a veteran who has received unemployment compensation at any time within one year prior to, and was unemployed on, the date of hire.

“9/11 veteran” means a veteran who was on active military service on or after September 11, 2001, in a designated area.

“Veteran” means a U.S. citizen or a resident alien who has:

  • received honorable discharge issued by the Secretary of Defense after having served 181 consecutive days of active duty or because of disability incurred while serving on active duty;
  • met the minimum active duty requirement as defined under federal law; or
  • active military service certified under federal law. 

“Date of hire” means the day that the qualified employee begins performing services as an employee of the qualified employer.

Subdivision 2.  [Credit amount] Allows qualified employers a nonrefundable credit for each disabled veteran, unemployed veteran, or 9/11 veteran employed by a qualified employer during a taxable year in the following amounts: 

  • ten percent of the wages paid to a qualified employee who is a disabled veteran, up to $3,000;
  • ten percent of the wages paid to a qualified employee who is an unemployed veteran, up to $1,500; and
  • ten percent of the wages paid to a qualified employee who is a 9/11 veteran, up to $500.

A qualified employer is allowed only one of the above credits for hiring a disabled veteran, unemployed veteran, or 9/11 veteran as a qualified employee.  The employer may not take the credit if the employer previously employed the disabled veteran, unemployed veteran, or veteran. 

Subdivision 3.  [Flow-through entities] Provides that credits granted to employers organized as a partnership, LLC taxed as a partnership, S-corporation, or multiple owners of a business are passed through to partners, members, shareholders, or owners, respectively, based on their share of the entity’s assets, or as specified in their organizational documents, as of the last day of the taxable year. 

Effective Date. This bill is effective beginning in tax year 2017.

 
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