Bill
HF 2197
Eliminate the marriage penalty for the child credit, raise its phaseout, and limit the Working Family Credit to earners with qualifying children.
HF 2197: Summary
Overview
- Bill Number: HF 2197
- Title: Individual income tax; child credit marriage penalty eliminated and credit phaseout increased, and working family credit limited based on earned income to taxpayers with qualifying children.
- Status: Author added Hudson; introduced March 12, 2025; referred to Taxes (first reading)
- Legislative actions to date:
- 2025-03-12: Introduction and first reading, referred to Taxes
- 2025-03-13: Author added Hudson
- Classification/Subject: Taxation—Income; Children and Minors; Marriage and Marriage Dissolution
Purpose and Intent
- The bill aims to modify Minnesota’s individual income tax credits related to families. Specifically, it seeks to:
- Eliminate the marriage penalty associated with the child credit.
- Increase the credit phaseout for the child credit.
- Limit the Working Family Credit (WFC) to taxpayers who have earned income and who have qualifying children.
Key Provisions (as described)
- Child Credit — Marriage Penalty Elimination
- The bill would remove or reduce the adverse tax impact that marriage could have on the child credit, ensuring married filers receive a credit closer to or equivalent to what single filers would receive under the same circumstances.
- Child Credit — Phaseout Increase
- The credit phaseout would be increased, meaning higher income levels would be required before the credit begins to decrease or would phase out more gradually. Specific thresholds or rates are not provided in the summary.
- Working Family Credit (WFC) — Eligibility Limitation
- The WFC would be limited to taxpayers with earned income who also have qualifying children. In effect, filers without qualifying children or those with no earned income could see reduced or eliminated WFC benefits under this proposal.
- Interaction and Compliance
- The bill would require implementation adjustments by the Minnesota Department of Revenue (DOR) to reflect these changes in tax computations, withholding, and annual filings.
Who Would Be Affected
- Taxpayers with qualifying children, particularly:
- Married couples filing jointly who currently face a marriage penalty in the child credit.
- Filers whose income is at or near the newly proposed phaseout thresholds for the child credit.
- Households claiming the Working Family Credit, with a caveat that eligibility would be tied to earned income and presence of qualifying children.
- Minnesota Department of Revenue, which would administer and enforce the revised credit structures and eligibility rules.
Procedural and Timeline Aspects
- This is an early-stage bill introduced on March 12, 2025, and referred to the Taxes committee.
- The only publicly captured actions to date are the introduction, first reading, and the subsequent addition of the author (Hudson) on March 13, 2025.
- Next steps would typically include committee hearings, potential amendments, and floor consideration.
Notes
- Specific numeric details (credit amounts, phaseout thresholds, and earned-income rules) are not provided in the summary. If PASSAGE is pursued, the bill would likely include precise dollar figures and interaction with other Minnesota and federal credits.
Compiled from official sources — confirm details with the bill’s official record.
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