This bill amends Minnesota Statutes to expand the dependent care credit for individual income tax purposes. It introduces a new subdivision in section 290.0131 that allows taxpayers claiming the dependent care credit to exclude certain amounts of dependent care assistance from their gross income. Additionally, it establishes definitions for "employment-related expenses" and "qualifying individual" in section 290.067, aligning them with the Internal Revenue Code while ensuring that income from the Minnesota family investment program does not affect the dependent status of a child. The bill also sets limits on eligible dependent care expenses, with a maximum of $12,000 for one qualifying individual and $24,000 for two or more.

Furthermore, the bill modifies the calculation of the dependent care credit, replacing the previous method with a formula based on eligible dependent care expenses multiplied by a credit percentage. It introduces provisions for deemed expenses for children under six years old cared for by a licensed family day care home operated by a parent, and it specifies requirements for identifying information to claim the credit. The bill also clarifies that the credit is refundable if it exceeds the taxpayer's liability and establishes rules for married couples filing separately. The effective date for these changes is set for taxable years beginning after December 31, 2024.

Statutes affected:
Introduction: 290.0131, 290.067