Teachers, homeowners, and seniors are among the groups of Minnesotans set to benefit from this year’s tax conformity bill.
The Senate Tax Committee met this week to approve updating Minnesota tax code to match its federal counterpart. The federal provisions, made by Congress in December 2014, are mostly one-year extensions of existing credits and deductions.
Tax conformity has an immediate impact on Minnesotans filing taxes by this year’s April 15 deadline. Teachers can continue to subtract up to $250 in out-of-pocket classroom expenses, and more than 30,000 students are estimated to be able to deduct qualified tuition and related expenses.
In addition to education-related deductions, this bill ensures Minnesota homeowners can continue to deduct mortgage insurance premiums. It also protects Minnesotans who lose their homes to foreclosure or short-sale from counting the difference between their outstanding mortgage balance and the home’s sale price as taxable income.
The Achieving a Better Life Experience (ABLE) Act of 2014 is a new provision to federal tax code, allowing 529 savings plans to be established for those diagnosed as blind or disabled before the age of 26. The full fiscal impact of this provision is contingent upon Minnesota establishing a program here, and a group of Senators are working to accomplish this as well. “It’s heartwarming to think the federal government can do something good for people and their families with such enthusiasm from both sides of the aisle,” said Sen. Ann Rest.
Revenue Commissioner Cynthia Bauerly highlighted the importance of tax conformity to Minnesota taxpayers and thanked the committee for its willingness to hear the bill early. Passing this bill as quickly as possible will allow tax filers to take full advantage of the federal benefits.
The bill was unanimously approved by committee members. Its next stop will be the Senate Floor. (S.F. 50)
