ST. PAUL – Legislation Rep. Lisa Demuth, R-Cold Spring, has authored to make childcare more affordable for Minnesotans is part of a $1 billion package of tax relief House Republicans unveiled Monday.
Demuth’s proposal would help families dealing with high childcare expenses by increasing the income threshold for the dependent-care credit from the current cap of $52,160 to $75,000, making thousands more families eligible for assistance paying childcare bills.
“This issue of high childcare costs is something legislators hear about all over the state,” Demuth said. “Many families are struggling to afford childcare, which is why we’re proposing to expand eligibility for the childcare tax credit – sometimes called the dependent care credit.”
Demuth said that, with Minnesota’s strong economy and a $1.5 billion budget surplus, the time is right to provide tax relief for families who use childcare and beyond.
“Our state’s surplus represents an over-collection from taxpayers and it’s time to provide relief,” Demuth said. “In addition to my childcare bill, we should end the state tax on social security and the proposal we put forward does that. It is exciting to think about what a game-changer that would be for our seniors, especially those on fixed incomes. Minnesota is in the slim minority that taxes social security and this is our chance to fix that, making our state more welcoming to retirees.”
The House Republican proposal provides relief to a wide swath of Minnesotans, from seniors to farmers, homeowners, Main Street businesses, college graduates with student loan debt. In addition to Demuth’s childcare bill, the package includes:
- Eliminating state taxes on social security benefits. House Republicans successfully pushed to eliminate social security taxes for 250,000-plus Minnesotans in 2017, this provision would finish that effort and eliminate social security taxes entirely.
- Doubling the student loan tax credit. House Republicans created the first-ever student loan tax credit of up to $500 for college graduates making payments on their loans. Their new proposal would double that credit to $1,000.
- Tax Fairness for Farmers and Main Street Businesses. Last session’s failure to enact full Section 179 conformity is causing massive unexpected tax bills for farmers and businesses. House Republicans are proposing to fully conform and make it retroactive so farmers and businesses are not stuck with tax bills many simply cannot afford.
- Property Tax Relief. By putting an additional $50 million into school equalization aid, this would effectively result in a property tax cut for Minnesota homeowners by reducing reliance on local property tax revenue.
- Increasing the Personal Exemption. Every Minnesotan would benefit from an approximately $1,300 increase to the personal exemption.
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