Senate Counsel, Research
and Fiscal Analysis
Minnesota Senate Bldg.
95 University Avenue W. Suite 3300
St. Paul, MN 55155
(651) 296-4791
Tom Bottern
Director
   Senate   
State of Minnesota
 
 
 
 
 
S.F. No. 1805 - Child and Dependent Care Credit Modification
 
Author: Senator Alice M. Johnson
 
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 would be phased out at income levels above $100,000 for claimants with employment-related expenses and at income levels above $25,000 for claimants without actual employment-related expenses. Effective beginning in tax year 2015.    

Subdivision

Provision

1

Provides that taxpayers are eligible for the Minnesota dependent care 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.  Clarifies language pertaining to claiming the credit for a parent’s actual employment-related expenses and deemed expenses for licensed home day care providers and parents with a newborn child.  Licensed home day care providers or married filers with a newborn child may claim the credit using actual or deemed expenses, but cannot use both calculations for claim the credit for the same child.  These taxpayers could claim the credit based on expenses paid to care for other qualifying individuals.    
 

2

Provides the maximum amounts of the credit available.  The credit amounts for actual expenses are increased to $1,050 for claimants with one child and $2,100 for claimants with two or more children.  The maximum credit for deemed expenses is $720 for claimants with one child and $1,440 for claimants with two children.  This credit is phased out for claimants with income in excess of $25,000.
 

3

Updates the base years for the inflation adjustment provisions for the credit. 
 

4

Makes clarifying changes to the provision of law that makes the credit refundable.
 

5

Strikes language that limits the Minnesota credit.  This language is no longer necessary given the increase by reference in sections 1 and 2 to the federal credit.
 

6

Recodifies the definition of “household income” used as the starting point to calculate the K-12 credit.  This is necessary because the reference in that credit is to the definition in the dependent care credit, which is repealed in section 7.
 

7

Repeals the definition of “household income” used as the starting point to calculate the dependent care credit.  Under this bill, the starting point to calculate the credit would be federal adjusted gross income.  

 

 
Check on the status of this bill
 
Back to Senate Counsel and Research Bill Summaries page
 

 
This page is maintained by the Office of Senate Counsel, Research, and Fiscal Analysis for the Minnesota Senate.
 
Last review or update: 03/25/2015
 
If you see any errors on this page, please e-mail us at webmaster@senate.mn