Bill
SF 5189
The bill creates a dollar-for-dollar tax credit up to $50,000 per taxpayer per year for contributions to qualifying women’s pregnancy centers.
Jurisdiction: Minnesota
Purpose
- Establish a new income, corporate franchise, and insurance premiums tax credit for contributions made to qualified women’s pregnancy centers.
- The credit is designed to encourage charitable contributions to pregnancy centers by providing a dollar-for-dollar reduction of tax liability, subject to limits and eligibility rules.
Key Provisions
1) New tax credit for contributions to women’s pregnancy centers (Revenue/Individuals and Businesses)
- Credit amount: Equal to the amount of contributions made by the taxpayer to a qualifying women’s pregnancy center, up to a maximum of $50,000 per taxpayer per taxable year.
- Carryforward: If the credit exceeds the taxpayer’s tax liability for the year, the excess may be carried forward to subsequent years. The carryforward first applies to the next taxable year and cannot exceed the taxpayer’s remaining tax liability after applying the current year credit.
- Interaction with other credits: A taxpayer claiming this credit cannot also claim the credit under Minnesota Statutes section 297I.20, subdivision 8, for the same contribution.
- Eligible contributions: A "contribution" is defined as a charitable contribution deductible under the Internal Revenue Code (IRC) section 170, including the IRC denial described in 408(d)(8), with the exception that IRC 170(b)(1)(G) applies regardless of taxable year.
- Ineligibility with itemized deductions/subtractions: The credit cannot be claimed for amounts used to take the itemized deduction under Minnesota law (section 290.0122, subdivision 4) or for the subtraction under Minnesota section 290.0132, subdivision 7.
- Nonresident/part-year resident rules: For nonresidents or part-year residents, the credit is allocated using the percentage specified in Minnesota Statutes section 290.06, subdivision 2c, paragraph (e).
- Definitions:
- “Women’s pregnancy center” means an organization that provides information, referrals, and support to encourage and assist pregnant women to carry pregnancies to term and to care for their children after birth.
- “Contribution” means a charitable contribution allowable as a deduction under IRC 170, with the noted IRC exceptions.
- Administration: The Minnesota Commissioner, in consultation with the Commissioner of Health, must maintain a list of qualifying pregnancy centers eligible for the credit.
- Effective date: Applies to taxable years beginning after December 31, 2025.
2) Credit applicability to other tax types (Corporate/Pass-Through and Insurance Premiums)
- The same credit amount (as calculated under the new §290.0696) may be claimed against the premiums tax under Minnesota Statutes, chapter 297I, subdivision 8, but only if the taxpayer is not claiming the same contribution for the §290.0696 credit.
- Carryforward rules mirror those in the income/corporate tax: excess credit carries forward to subsequent years, limited by the taxpayer’s liability after applying current-year credit.
- Interaction with state aid: This credit does not affect the calculation of fire state aid under section 477B.03 or police state aid under section 477C.03.
- Effective date: Applies to taxable years beginning after December 31, 2025.
3) Administrative and procedural details
- The act creates a dedicated list of eligible pregnancy centers to prevent ineligible entities from qualifying for the credit.
- The two sections establishing the credit (for general taxes and for insurance premiums) are both effective for taxable years beginning after December 31, 2025.
Who is affected
- Minnesota individual and corporate taxpayers who make qualifying contributions to registered women’s pregnancy centers.
- Partners, LLCs taxed as partnerships, S corporations, and other pass-through entities: credits flow through pro rata to the owners/partners/shareholders.
- Nonresident or part-year residents: the credit must be prorated according to the state tax liability percentage rules.
- Qualifying pregnancy centers: designated as eligible recipients for purposes of the credit, as maintained by the state tax and health departments.
Potential Impact
- Financial: Up to $50,000 per taxpayer per year in tax credits for eligible contributions; potential for carryforward to future years.
- Administrative: New requirement to maintain and verify a list of eligible pregnancy centers; monitoring of interactions with existing credits to prevent double-dipping.
- Policy: Encourages philanthropic support for pregnancy-related services, with a narrowly defined scope and explicit interactions with other tax incentives.
Effective Date
- Taxable years beginning after December 31, 2025.
Compiled from official sources — confirm details with the bill’s official record.
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