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SF 2101

Inflation adjustment repeal for the child tax credit and working family credit

2025-2026 Regular Session Introduced by Steve Drazkowski and 3 co-sponsors

Bill freezes Minnesota's Child Tax Credit and Working Family Credit at current levels by repealing automatic annual inflation adjustments, reducing long-term support for working families.

Referred to Taxes
#taxation #taxation-income
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WeVote Research Nonpartisan
Bill Summary · SF 2101

Legislative bill overview

SF 2101 would repeal automatic inflation adjustments for Minnesota's Child Tax Credit and Working Family Credit. Currently, these tax credits are indexed to inflation annually, meaning their value increases each year to maintain purchasing power. This bill would freeze the credits at their current levels indefinitely.

Why is this important

Tax credits directly reduce the amount of taxes families owe, making them a significant financial benefit for lower and moderate-income households. Eliminating inflation adjustments means these credits would gradually lose value over time as prices rise, effectively reducing support for working families and parents without legislative action to increase the amounts manually.

Potential points of contention

  • Impact on working families: Freezing credits reduces support for the exact groups the credits were designed to help, especially during periods of high inflation when purchasing power matters most
  • Budget implications: Repealing inflation adjustments increases state tax revenue over time, but opponents may argue this constitutes a tax increase on families rather than a policy improvement
  • Administrative burden: Without automatic adjustments, future legislatures would need to periodically vote to manually increase credits to maintain their intended benefit level, or allow them to erode in value

Compiled from official sources — confirm details with the bill’s official record.

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