Saint Paul, Minn. — House Democrats today approved new tax credits and rebates to help Minnesotans who are struggling with rising costs. The majority of the benefits in the House DFL tax bill go to families with young children, senior citizens living on fixed incomes, and people with student loan debt.
The House DFL tax bill reduces the cost of child care by providing a “Great Start Child Care Credit” of up to $3,000 for each child under five years of age, capped at $7,500 in total tax credits. It also provides a one-time “Child Tax Credit Rebate” of $325 for each child under 17 years of age.
“This year, Democrats in the House are proposing significant financial assistance to help reduce rising costs,” said House Tax Committee Chair Rep. Paul Marquart (DFL-Dilworth). “We are especially concerned about the impact of out-of-control child care costs on family budgets, with some families paying as much or more than their monthly mortgage payments. That’s why we’re providing tax credits for families who cannot afford these rising costs.”
The House DFL bill would reduce the cost of housing by making the biggest investment in property tax refunds and renter’s credits in decades. Democrats’ proposal expands eligibility and benefits, and makes it easier for filers to apply. As a result, more than 150,000 additional renters will qualify, with an average benefit of $700. Statewide, 30% of renter’s credit recipients are seniors or people with disabilities. In addition, more than 1.3 million homesteads that currently qualify for the market value exclusion will see an increased exclusion.
“House DFLers are delivering the largest long-term investments in property tax cuts and renters’ credit in decades, as well as providing ongoing investments in communities across the state,” said Rep. Cheryl Youakim (DFL-Hopkins), chair of the House Property Tax Division. “These changes will put money back into Minnesotans' pockets at a time when they need it the most.”
The House DFL bill makes it possible for senior citizens with adjusted gross incomes up to $75,000 (married joint) or $58,600 to subtract 100 percent of taxable Social Security income included in adjusted gross income (AGI).
“House DFLers care deeply about the challenges Minnesotans are facing,” said House Speaker Melissa Hortman. “It's getting harder for workers and families to make ends meet. They can see an economy that is tilted against them. Corporate profits are soaring while Minnesotans are seeing their costs go up. House Democrats are focused on reducing costs and providing help to those who need it the most: workers, families, and seniors.”
The House DFL bill also increases the student loan tax credit to $1,400 per person, up from $500. According to the Student Borrower Protection Center, there are approximately 750,000 student loan borrowers currently in Minnesota with more than $2.9 billion in outstanding debt.
Under the Minnesota Constitution, all tax bills must originate in the House of Representatives. The next step in the legislative process will be to establish a conference committee with members from both chambers to work out stark differences in the two competing bills.