This bill amends Minnesota's tax statutes to eliminate the marriage penalty associated with the child credit and increase the phaseout thresholds for certain tax credits. Specifically, the phaseout threshold for combined credits is raised from $35,000 to $75,000 for joint filers and from $29,500 to $37,500 for single filers. Additionally, the bill introduces an inflation adjustment mechanism for these thresholds, effective for taxable years beginning after December 31, 2025.

Furthermore, the bill limits the working family credit based on earned income to taxpayers with qualifying children. The credit amount is adjusted, increasing the maximum earned income threshold from $8,750 to $9,480, and raising the credit values from $925 to $1,000, $2,100 to $2,270, and $2,500 to $2,710. The eligibility for the credit is also refined to include only those taxpayers with a qualifying older child or a qualifying child as defined in the relevant statute. These changes are set to take effect for taxable years beginning after December 31, 2024, with certain provisions for inflation adjustments effective after December 31, 2025.

Statutes affected:
Introduction: 290.0661, 290.0671