Minnesota HF 494: Individual income and corporate franchise tax provisions modified, and tax credits for parental leave costs allowed.

Bill Text

1.1 A bill for an act​
1.2 relating to taxation; individual income and corporate franchise; allowing tax credits​
1.3 for parental leave costs; amending Minnesota Statutes 2022, sections 290.0131,​
1.4 by adding a subdivision; 290.0133, by adding a subdivision; proposing coding for​
1.5 new law in Minnesota Statutes, chapter 290.​
1.6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:​
1.7 Section 1. Minnesota Statutes 2022, section 290.0131, is amended by adding a subdivision​
1.8 to read:​
1.9 Subd. 19.Wages paid for parental leave.The amount of wages paid to employees on​
1.10 parental leave, to the extent deducted in calculating federal adjusted gross income and used​
1.11 to claim the credit under section 290.0693, subdivision 1, is an addition.​
1.12 EFFECTIVE DATE.This section is effective for taxable years beginning after December​
1.13 31, 2022.​
1.14 Sec. 2. Minnesota Statutes 2022, section 290.0133, is amended by adding a subdivision​
1.15 to read:​
1.16 Subd. 15.Wages paid for parental leave.The amount of wages paid to employees on​
1.17 parental leave, to the extent deducted in calculating federal taxable income and used to​
1.18 claim the credit under section 290.0693, subdivision 1, is an addition.​
1.19 EFFECTIVE DATE.This section is effective for taxable years beginning after December​
1.20 31, 2022.​
1​Sec. 2.​
REVISOR EAP/NS 23-01207​12/20/22 ​
State of Minnesota​
This Document can be made available​
in alternative formats upon request​
HOUSE OF REPRESENTATIVES​
H. F. No. 494​
NINETY-THIRD SESSION​
Authored by Robbins; Anderson, P. E., and Bennett​01/18/2023​
The bill was read for the first time and referred to the Committee on Taxes​

2.1 Sec. 3. [290.0693] TAX CREDITS FOR PARENTAL LEAVE.​
2.2 Subdivision 1.Employer tax credit for paid leave.(a) A qualified employer is allowed​
2.3 a credit against the taxes imposed under this chapter equal to 25 percent of the amount of​
2.4 wages paid to qualifying employees during any period in which the qualifying employees​
2.5 are on parental leave. Wages are limited to wages that are subject to withholding under​
2.6 section 290.92.​
2.7 (b) The credit allowed to an employer under this subdivision for a qualifying employee​
2.8 for a taxable year is limited to the lesser of:​
2.9 (1) $3,000; or​
2.10 (2) 25 percent of the product of:​
2.11 (i) the wages normally paid to the qualifying employee per hour, or fraction of an hour,​
2.12 for services performed for the employer; and​
2.13 (ii) the number of hours, or fraction of an hour, for which parental leave is taken.​
2.14 (c) For a qualifying employee who is not paid on an hourly basis, wages must be prorated​
2.15 to an hourly basis under instructions established by the commissioner.​
2.16 (d) The amount of parental leave that may be taken into account for a qualifying employee​
2.17 for any taxable year cannot exceed six weeks.​
2.18 Subd. 2.Employee tax credit.(a) An eligible employee is allowed a credit against the​
2.19 taxes imposed under this chapter equal to 25 percent of the eligible employee's forgone​
2.20 wages for the period of the unpaid parental leave.​
2.21 (b) For purposes of this subdivision, "forgone wages" means the number of weeks of​
2.22 unpaid leave taken, not to exceed six weeks, multiplied by the lesser of:​
2.23 (1) the greater of the total wages received by the eligible employee in the immediately​
2.24 preceding taxable year or in the current taxable year, divided by 52; or​
2.25 (2) $1,000 multiplied by the index value under paragraph (e) for the county in which​
2.26 the eligible employee resides when taking the unpaid leave.​
2.27 (c) For purposes of this subdivision, "unpaid parental leave" or "unpaid leave" means a​
2.28 period of parental leave for which an employee receives no wages or other compensation​
2.29 and has no self-employment earnings.​
2.30 (d) For purposes of this subdivision, "week" means a period consisting of seven​
2.31 consecutive calendar days.​
2​Sec. 3.​
REVISOR EAP/NS 23-01207​12/20/22 ​

3.1 (e) The commissioner must determine index values for purposes of the calculations​
3.2 under paragraph (b) using information on the weekly rate for the 75th percentile for infants​
3.3 from the most recent child care market rate survey prepared by the commissioner of human​
3.4 services under section 119B.02, subdivision 7, that is available by July 15 of the calendar​
3.5 year in which the taxable year begins. The index amount for a county equals the rate for​
3.6 the family child care price cluster for the county, divided by the rate for the median price​
3.7 cluster. The commissioner shall publish the index values by county on the department's​
3.8 website and in the instructions for the appropriate tax return and forms. The commissioner's​
3.9 determination is not a rule and is not subject to the Administrative Procedure Act in chapter​
3.10 14, including section 14.386.​
3.11 Subd. 3.Definitions.(a) For purposes of this section, the follo