This bill amends Minnesota Statutes to expand the dependent care credit for individual income tax purposes. It introduces a new subdivision to section 290.0131, which allows taxpayers claiming the dependent care credit to exclude certain amounts of dependent care assistance from their gross income. Additionally, it modifies section 290.067 by adding definitions for "employment-related expenses" and "qualifying individual," and it establishes new criteria for calculating eligible dependent care expenses and the credit percentage based on adjusted gross income. The bill also specifies that the credit will be refundable, meaning that if the credit exceeds the taxpayer's liability, the excess will be refunded.

Key changes include the introduction of a limit on eligible dependent care expenses—$12,000 for one qualifying individual and $24,000 for two or more—and a credit percentage that starts at 50% but decreases as income rises. The bill also clarifies the rules for married couples filing separately, stating that only one spouse may claim the credit. The effective date for these changes is set for taxable years beginning after December 31, 2024.

Statutes affected:
Introduction: 290.0131, 290.067