ST. PAUL, MN – Today the Minnesota House of Representatives passed legislation that cuts taxes for over one million middle class Minnesotans and repeals three business-to-business taxes. The bill, which passed the Senate earlier today, now heads to Governor Mark Dayton to be signed into law.
If taxpayers have not filed their tax return, the Department of Revenue is asking that taxpayers wait until Monday to file. If they have already filed, the Department of Revenue will examine the return to see if they qualify for these tax cuts and notify them if they need more information or if they need to file an amended return.
“This middle class tax cut package keeps Minnesota’s economy on the right track,” said State Representative Carly Melin (DFL – Hibbing), who voted in support of the bill. “I’m especially pleased we were able to expand the Working Family Credit, which will benefit many low-income families in northeastern Minnesota.”
Last session the House included federal tax conformity for tax year 2013 and beyond, but it did not end up in the final budget signed into law. More than one million middle-class Minnesotans will see $225 million in tax cuts due to federal conformity and boosting the state’s Working Family Credit. The tax cuts through federal conformity include:
· $111 million for middle income married families by eliminating the “marriage penalty”
o 650,000 families will see an average tax decrease of $115 starting in 2015
o The vast majority of families claiming the standard deduction make less than $75,000
· $36 million for low income working families by matching the state’s Working Family Credit with the federal Earned Income Tax Credit (EITC)
o 54,000 working families will see an average tax decrease of $300
· $7.2 million for homeowners that refinanced or had a short sale
· $3.9 million for new homeowners through deduction of mortgage insurance premiums
o 80,000 new homeowners will see an average tax cut of $60
· $26.4 million for students and parents paying for college and students paying off loans
· $1.9 million for Minnesota families with dependents
o 26,000 families with household incomes below $38,570 will see a $80 tax decrease
· $400,000 for adopting parents who receive adoption assistance from employers
· $1.1 million for 60,0000 teachers with the classroom expense deduction for educators
· $4 million for charitable contributions
· $6.7 million for businesses - to make tax filing simpler for businesses
(Source: Non-partisan House Research)
The bill increases the Working Family Credit above and beyond federal conformity, providing a total of $66.2 million in tax cuts to 331,000 claimants earning less than $49,103. The average family will see a $146 tax cut through this expansion of the Working Family Credit.
The final bill also repeals three business-to-business taxes on warehousing and storage services, commercial equipment repair (including farm machinery) and telecommunications equipment.
Melin encourages her constituents to stay in touch during the 2014 Legislative Session with any questions, comments or other feedback. She can be reached by phone at 651-296-0172 or toll-free at 888-726-0711, by email at rep.carly.melin@house.mn, or by postal mail at 515 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155.