HF1437

Purpose

• Adds a Minnesota individual income tax credit for stillbirths.
• The credit is available for each birth that results in a stillbirth, as evidenced by a certificate of birth issued under Minnesota law.

Main Provisions

• Credit amount: Eligible individuals may claim a credit equal to $2,000 for each birth that results in stillbirth.
• Eligibility and dependency: The birth must have a certificate of birth resulting in stillbirth issued under Minn. Stat. § 144.2151, and the child would have been a dependent of the taxpayer under Internal Revenue Code section 152.
• Timing: The credit may be claimed only in the taxable year in which the stillbirth occurred.
• Residency and allocation for nonresidents: For a nonresident or part-year resident, the credit must be allocated based on the percentage calculated under Minn. Stat. § 290.06, subd. 2c, par. e.

Significant Changes

• Creates a new stillbirth credit within the Minnesota income tax system.
• Ties eligibility to the child’s potential status as a dependent under IRC § 152 and to the issuance of a stillbirth certificate under Minn. Stat. § 144.2151.
• Establishes a specific allocation method for nonresidents and part-year residents, using the state income tax allocation rules in § 290.06, subd. 2c, par. e.

How This Changes Existing Law

• Amends Minn. Stat. 2024, § 290.0685, subd. 1 to add a credit for stillbirths, defined by the certificate and dependency criteria, and specifies residency-based allocation.

Practical Implications

• Families experiencing a stillbirth could receive a direct state income tax credit of up to $2,000, provided the conditions above are met.
• The credit is non-transferable and applies only in the year of the event.
• Nonresidents/part-year residents receive a prorated credit based on Minnesota-source factors.

Relevant Terms - stillbirth - certificate of birth resulting in stillbirth - stillbirth certificate - Minn. Stat. § 144.2151 - credit against the tax - $2,000 per birth - eligible individual - dependent (as defined in Internal Revenue Code § 152) - Internal Revenue Code § 152 - taxable year - nonresident - part-year resident - Minn. Stat. § 290.06, subd. 2c, par. e - Minn. Stat. § 290.0685, subd. 1 - allocation of credit