Purpose of the Bill

The bill aims to establish a refundable tax credit for individuals who are family members providing child care in the state of Minnesota. This initiative is intended to alleviate some financial burdens for family members offering child care support, recognizing their contribution to supporting working families.

Main Provisions

• Tax Credit for Family Child Caregivers: The bill introduces a $2,000 refundable tax credit for qualifying individuals who provide child care to their relatives.
• Eligibility: To qualify as a "qualifying caregiver," an individual must provide at least 416 hours of child care in a year, enable the child's parent or guardian to work, and meet several other criteria.
• Qualifying Child and Relative: The child must be under six years old by the end of the tax year. Relatives such as grandparents, siblings, uncles, aunts, or cousins can qualify as caregivers.
• Income Thresholds: The credit is reduced by 10% of any adjusted gross income that exceeds $100,000 for married taxpayers filing jointly, and $50,000 for others.
• Nonresident Adjustments: For part-year or nonresident individuals, the credit amount will be adjusted based on their time in Minnesota.
• Record-Keeping: Individuals claiming the credit need to maintain records of the child care provided.

Significant Changes to Existing Law

The bill adds new provisions to Minnesota's tax law by introducing a policy that supports family members involved in child care with a financial role. It seeks to ease the tax burden on these individuals, acknowledging their often uncompensated help, and integrates this mechanism into the state's fiscal framework.

Relevant Terms

refundable tax credit, family child caregivers, qualifying caregiver, qualifying child, adjusted gross income, phaseout threshold, gainful employment, general fund, licensure exclusion.