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SF 4961

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

2025-2026 Regular Session Introduced by Grant Hauschild

The bill excludes scholarships for dependents and dependent FSAs/HSAs from income used to calculate the Minnesota homestead credit refund, potentially increasing eligibility or ref

Referred to Taxes
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Bill Summary · SF 4961

Bill Summary: SF 4961 (2025-2026) — Minnesota

Title

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

Purpose and intent (high level)

This bill proposes to modify the income definition used to determine eligibility and calculation for the Minnesota homestead credit refund program. Specifically, it excludes certain types of funds—scholarships, dependent flexible spending accounts (FSAs), and health spending accounts—from counted income. By removing these amounts from income, more taxpayers could qualify for the homestead credit refund, or receive a higher refund, under the program.

Key provisions and changes

  • Exclusion from income for homestead credit calculation:
    • Scholarships received by dependents are excluded from income for the purposes of computing the homestead credit refund.
    • Dependent Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) used for dependents are excluded from income in the homestead credit context.
  • Scope of exclusions:
    • Applies specifically to the income definition used in the homestead credit refund program, not necessarily to other tax calculations or programs.
  • Implementation status:
    • Introduced and referred to the House Taxes committee (as of 2026-04-07). Co-sponsor listed: Grant Hauschild.

Affected parties and potential impact

  • Taxpayers claiming the homestead credit refund:
    • Households with dependents who receive scholarships, or who contribute to dependent FSAs/HSAs, would see these funds excluded from income for homestead credit purposes.
    • Potential outcome: increased eligibility or larger refunds for eligible filers, depending on existing income and credit calculations.
  • Minnesota Department of Revenue and tax administration:
    • Will need to implement changes to the income calculation rules for the homestead credit refund program, update forms and guidance, and potentially adjust IT systems to reflect the new exclusion.

Procedural and timeline notes

  • Action history:
    • Introduced and had its first reading on April 7, 2026.
    • Referred to the Taxes committee on April 7, 2026.
  • Sponsors:
    • Primary sponsor not listed in the provided text; co-sponsor: Grant Hauschild.
  • Next steps:
    • The bill will be considered by the Taxes committee, potentially undergo amendments, and then proceed through the legislative process (floor votes in the HOUSE and SENATE, conference committees if needed).

Practical considerations and context

  • The homestead credit refund program is designed to assist homeowners and renters with property tax relief. Changes that exclude certain income types from the program can broaden eligibility or increase refunds for some filers.
  • Exclusions tied to scholarships and dependent FSAs/HSAs suggest a policy goal of reducing the counted income of families with dependent-related educational or health-related savings, aligning benefits with actual economic burden rather than available savings.

If you’d like, I can add a brief comparison to current law (how income is currently defined for the homestead credit) or track updates as the bill moves through committee stages.

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

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