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S.F. No. 1494 - Child and Dependent Care Credit Modification
Author: Senator Chris A. Eaton
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
Date: March 25, 2015


This bill modifies the Minnesota child and dependent care credit to conform the credit amounts to the federal credit.  The Minnesota credit would remain refundable as under current law (the federal credit is nonrefundable) and is phased out at income levels above $70,000.  The bill also changes the starting point of income for purposes eligibility for the credit.  Under current law, the starting point of the credit is household income, which is income from all sources, including nontaxable sources.  The bill uses federal adjusted gross income (FAGI) as the starting point.  Effective beginning in tax year 2015.    




Strikes language that limits the Minnesota dependent care credit.  Taxpayers would be eligible for the credit in the same amounts as the federal credit (maximum of $1,050 for claimants with one dependent and $2,100 for claims with two or more dependents), but the Minnesota credit would remain refundable.  Phases out the amount of the credit for taxpayers with adjusted gross income in excess of $70,000.  The $70,000 amount is not adjusted for inflation.    


Repeals the limitations on the Minnesota dependent care credit amount and the inflation adjustment of the income threshold. 


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