SF3865

Purpose

This bill creates a tax benefit for people involved in AmeriCorps and National Service programs. It adds a subtraction (a reduction) from Minnesota individual income for certain AmeriCorps-related stipends, living allowances, and educational awards, making these amounts non-taxable at the state level.

Main Provisions

• Amends Minnesota Statutes 2024, section 290.0132, subdivision 16 to include a new subtraction.
• The subtraction applies to four specific types of income: 1) A stipend paid to an AmeriCorps volunteer under United States Code title 42 section 4955. 2) A living allowance provided to a National Civilian Community Corps (NCCC) volunteer under United States Code title 42 section 12618. 3) A stipend paid to an AmeriCorps Seniors volunteer under United States Code title 42 sections 5011 and 5013b. 4) A national service educational award received from the National Service Trust under United States Code title 42 sections 12601 to 12604, for service in an approved AmeriCorps National Service program.
• All four item types are added to the list of income that can be subtracted from Minnesota taxable income, effectively making them non-taxable for state income tax purposes.

Significant Changes to Existing Law

• Introduces a new subtraction for specific AmeriCorps-related amounts, expanding the types of AmeriCorps income that are exempt from Minnesota income tax.
• The change is limited to the four listed categories and relies on federal definitions and program rules tied to AmeriCorps and National Service.

Practical Effect

• Individuals participating in AmeriCorps or AmeriCorps Seniors, or receiving National Service Educational Awards for such service, may reduce their Minnesota taxable income by the amounts described.
• This change does not alter federal taxation or other state laws beyond adding these specific income types to the subtraction.

Relevant Terms AmeriCorps, AmeriCorps volunteers, stipends, living allowance, National Civilian Community Corps, NCCC, AmeriCorps Seniors, stipends (AmeriCorps Seniors), national service educational award, National Service Trust, United States Code, 42 U.S.C., subtraction, Minnesota income tax, Minnesota Statutes 2024, section 290.0132, subdivision 16, approved AmeriCorps National Service program.