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HF 4647

Scholarships, dependent flexible spending accounts, and health flexible spending accounts excluded from income definition used by the homestead credit refund program.

2025-2026 Regular Session Introduced by Nathan Coulter and 1 co-sponsor

Minnesota bill excludes scholarships and flexible spending accounts from homestead credit income calculations, expanding tax relief eligibility for low-income homeowners and renters.

Introduction and first reading, referred to Taxes
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WeVote Research Nonpartisan
Bill Summary · HF 4647

Legislative bill overview

HF 4647 modifies Minnesota's homestead credit refund program by excluding scholarship funds and dependent/health flexible spending account (FSA) distributions from the income calculations used to determine eligibility and benefit amounts. The homestead credit refund is a tax benefit that provides property tax relief to low- and moderate-income homeowners and renters.

Why is this important

This change would expand homestead credit eligibility by reducing the "countable income" threshold that determines who qualifies for the program and how much they receive. For households receiving scholarships or using FSAs—particularly for dependent care or medical expenses—this could increase their tax relief benefits or make them newly eligible, potentially providing meaningful financial assistance to working families and students.

Potential points of contention

  • Fiscal impact: Expanding eligibility and benefit amounts increases program costs to the state budget, which could require offsetting revenue sources or reductions elsewhere
  • Income measurement philosophy: Some argue FSA and scholarship distributions shouldn't count as "income" since they're often set-asides or designated for specific purposes, while others contend they represent available resources that should affect need-based benefits
  • Scope creep concerns: Critics may worry this is the first step toward excluding other types of assistance from income calculations, potentially hollowing out the program's targeting to those truly in need

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

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