SF5010

Purpose

• The bill changes how the Homeowners Homestead Credit Refund works to increase property tax refunds for homeowners by reducing the copays taxpayers must pay and shifting more of the cost into the state refund.

Key Provisions

• Amends Minnesota Statutes 2024 section 290A.04 subdivision 2, related to the Homeowners Homestead Credit Refund.
• Establishes a tiered calculation: if property taxes payable exceed a percent of the household income, the claimant pays a portion (the percent of income for the relevant household income level) plus the claimant’s share of the remaining property taxes payable. The rest is covered by the state as the state refund, up to a maximum amount shown in the table.
• Provides a detailed table linking household income ranges to:
  • Percent of income (the share the claimant must pay)
  • Percent paid by the claimant of the remaining property taxes payable
  • Maximum state refund available
• Introduces an upper-income cutoff: no payment is allowed when household income reaches the top tier (the table shows a high-income threshold beyond which the state does not issue a payment).
• Overall effect: increases the portion of property tax relief funded by the state and reduces out-of-pocket costs for many claimants.

Significance and Changes from Current Law

• Replaces/overhauls the prior calculation method for the Homeowners Homestead Credit Refund by using a formal tiered structure with specific income brackets and percentages.
• Changes the amount of the refund a homeowner can receive by adjusting both the claimant’s share (copay) and the state’s share (state refund), subject to a maximum refund.
• Adds an explicit income-based cap to determine eligibility for any payment.

Practical Considerations

• Implementation would require administration to apply the new income-based percentages and compute the maximum state refund for each claimant based on income and property taxes payable.

Relationship to Existing Law

• This is a modification of Minnesota Statutes 2024 section 290A.04 subdivision 2, altering how the Homeowners Homestead Credit Refund is calculated and paid.

Potential Outcomes

• For many homeowners, refunds could increase due to smaller copays and a larger state-funded portion.
• Some higher-income households may receive no payment under the new cap.

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Relevant Terms

• Homeowners homestead credit refund
• property taxes payable
• household income
• percent of income
• percent paid by claimant
• maximum state refund
• state refund
• Minnesota Statutes 2024 section 290A.04 subdivision 2
• copay
• no payment / income cap