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Workforce training tax credits

Published (3/18/2011)
By Mike Cook
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Tax credits could be provided for employees looking to better their skills.

Sponsored by Rep. Kim Norton (DFL-Rochester), HF40 would create a Lifelong Learning Account program within the Department of Employment and Economic Development.

It would create a 50 percent refundable tax credit for individual and business contributions to accounts used for worker education and training expenses. The maximum credit would be $1,000 for individuals and $500 for businesses.

Like 401(k) retirement accounts, employees would be permitted to contribute to the account, and employers would match their contributions up to an annual cap. A 25 percent penalty would be imposed if the money was withdrawn for a purpose other than education.

Approved March 10 by the House Higher Education Policy and Finance Committee, the bill was sent to the House Jobs and Economic Development Finance Committee. The Senate companion, SF843, sponsored by Sen. David Senjem (R-Rochester), awaits action in the Senate Jobs and Ecomonic Growth Committee.

“Given the economy and what’s happened during this recession, had these accounts been in place for employees and employers over the years, during this recession we would have had an easier time, I think, getting some of those unemployed folks back into school because they would have had these accounts to tap into,” Norton said.

Norton said higher education institutions would benefit because money would be coming into the colleges; however, the tax credit would be a cost to the state. No fiscal note was provided.

“We always see educating our young people as a public good, but we often talk about educating adults as a private good. I would say I’m not certain that’s true,” Norton said.

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