Purpose

This bill aims to change Minnesota tax law by removing automatic inflation-based increases to two tax credits: the child tax credit and the working family credit. By repealing the inflation adjustment, these credits would no longer automatically rise with inflation.

Main Provisions

• Repeal of inflation adjustments: The bill repeals Minnesota Statutes 2024, sections 290.0661 subdivision 7 and 290.0671 subdivision 7, which currently provide inflation-based increases to the child tax credit and the working family credit.
• Scope of repeal: The change is limited to removing the inflation adjustment mechanism for these two credits; no new credits or other tax provisions are added.

Significant Changes to Existing Law

• Automatic increases halted: The child tax credit and the working family credit would stop increasing in value with inflation. In future years, the credits would remain at their current dollar amounts (as defined in the statute prior to the inflation adjustment) rather than rising with inflation.
• Tax and budget effect: For some taxpayers, the real value of these credits could decline over time relative to rising prices. The change also reduces the automatic adjustment built into these credits, potentially affecting overall tax relief amounts and state revenue.

Implementation Notes

• Effective date: The introduced text does not specify an effective date. Details about when the repeal would take effect would appear in the final statute or an enacted version.

Summary

• The bill repeals the inflation adjustment for the child tax credit and the working family credit, removing automatic increases tied to inflation and keeping credits at fixed amounts going forward.

Relevant Terms - child tax credit - working family credit - inflation adjustment - repeal - Minnesota Statutes 2024 - 290.0661 subdivision 7 - 290.0671 subdivision 7 - taxes - individual income tax