Supplemental Tax Omnibus Includes Tax Relief for Families

ST. PAUL, Minn – The Senate supplemental omnibus tax bill (H.F. 3931) provides tax relief for working families, helps combat the growing burden of student debt, and creates a new paid leave program for state workers. The bill, authored by Sen. Rod Skoe (DFL-Clearbrook), passed the Senate on a vote of 37-30 Wednesday.

“This year’s supplemental tax bill continues to build on our goal of providing a fairer tax system for all Minnesotans. We know student debt is a major issue across this state and have worked hard to make higher education more affordable. This bill helps students who are paying off their loans, provides greater tax relief to working families, and helps Minnesotans care for a new child or sick relative,” said Skoe.

A provision in the bill expands eligibility for the state’s Working Family Credit, a proven tool to directly improve the financial health of working, lower income Minnesotans. Nearly 340,000 households received the Working Family Credit in 2013 – 48 percent of which were in Greater Minnesota. State Sen. Ann H. Rest (DFL-New Hope), chair of the Senate Tax Reform Division, authored the proposal.

“Targeted programs like the Working Family Credit make our tax system more equitable. This credit is an effective tool to reduce poverty and is one way we can work to reduce economic disparities across our state,” said Rest.

The supplemental tax omnibus bill also invests in Minnesota families by creating a new paid family leave program that provides up to 12 weeks of partial wage replacement. Workers can use the program for leaves due to pregnancy, bonding with a new baby, or caring for a seriously ill family member. Research has proven that offering paid family leave leads to healthier children, workers who use less sick time, and cost savings to businesses thanks to increased employee retention.

Targeted tax relief provisions in the bill include:

  • Working Family Credit: $48.8 million in 2017, $109.9 million in the next biennium. This provision reduces the tax burden for 386,000 low and middle income tax filers by an average of $125, and expands eligibility for the credit to an additional 109,500 Minnesotans – including young workers without children.
  • Student loan credit: $36.1 million in 2017, $74.6 million in the next biennium. This provision creates a credit of up to $1,000 for eligible individuals and their parents who are paying for student loans. The percentages of student loan payments eligible for the credit are:
    • 50 percent of qualified educational loans.
    • 65 percent of qualified loans for eligible individuals in a public service job.
    • 75 percent of qualified loans for eligible individuals in an education profession.
  • Tax conformity: The supplemental omnibus tax bill conforms to federal changes made in 2015 including the Slain Officer Family Support Act, Don’t Tax Our Fallen Public Safety Heroes Act, Bipartisan Budget Act, and Protecting Americans from Tax Hikes Act.
  • Nameless job application credit: $1 million each year through 2019. This provision creates a tax credit that incentivizes businesses to adopt nameless job application processes, where an applicant’s name is withheld during primary screening rounds of the hiring process. The total credits are capped at $1 million annually.
  • Citizenship credit: $1.3 million in 2017, $2.9 million in the next biennium. This bill removes the financial barrier to citizenship for many immigrants by providing a credit of up to $700 for naturalization expenses.
  • Credit for parents of stillborn children: $800,000 in 2017, $1.6 million in the next biennium. This provision helps families pay for uncompensated costs that often arise after a stillbirth by creating a $2,000 one-time tax credit.

The supplemental omnibus tax bill is a responsible approach to maintaining a balanced budget while providing $120.2 million in relief for Minnesota taxpayers in 2017 and $214.2 million in the next biennium. This bill will now be considered in a conference committee along with provisions passed by the Senate in the 2015 omnibus tax bill (H.F. 848).

Senator Ann Rest
Ann Rest represents District 45, which includes portions of the western suburbs of Hennepin County in the Twin Cities metro area.

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Senator Rod Skoe
Rod Skoe represents District 2, which includes all or portions of Becker, Beltrami, Clearwater, Hubbard, Lake of the Woods, Mahnomen, Otter Tail and Wadena counties in the northwestern part of the state. He chairs the Tax Committee.

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