SF1646

Purpose

To modify Minnesota’s individual income tax rules by adding a stillbirth-related tax credit. The bill creates a credit for eligible individuals for each birth that results in a stillbirth, helping families on their tax bill in the year the stillbirth occurs.

Main Provisions

• Credit amount: A credit of $2,000 (two thousand dollars) for each birth that results in a stillbirth.
• Certificate requirement: The birth must result in a stillbirth documented by a certificate of birth under section 144.2151.
• Timing: The credit can be claimed only in the taxable year in which the stillbirth occurred.
• Dependency requirement: The child would have been a dependent of the taxpayer under Internal Revenue Code section 152.
• Eligibility: The credit applies to eligible individuals who owe Minnesota income tax under the state tax code.
• Nonresident/part-year residents: For individuals who are nonresidents or part-year residents, the credit must be allocated based on the percentage calculated under Minnesota Statutes section 290.06, subdivision 2c, paragraph e.

Changes to Existing Law

• Adds a new subdivision to Minnesota Statutes 2024, section 290.0685, subdivision 1, to establish the stillbirth credit.
• Clarifies how the credit is calculated and allocated for residents and nonresidents, tying it to the stillbirth certificate and the dependent status.

How It Works in Practice

• A qualifying individual files their Minnesota tax return for the year of the stillbirth and claims the $2,000 credit for each eligible stillbirth birth.
• If the taxpayer is a nonresident or part-year resident, the credit is prorated according to the specified allocation method in 290.06, subdivision 2c, paragraph e.

Impact on Existing Law

• Introduces a new credit category within the Minnesota income tax system specifically tied to stillbirth events.
• Requires documentation via the stillbirth certificate process (section 144.2151) and uses the IRC 152 dependent definition for eligibility.
• Adds a method to allocate the credit for nonresidents/part-year residents, ensuring the credit aligns with residency status.

Relevant Terms stillbirth credit, eligible individual, Minnesota income tax, certificate of birth, stillbirth, section 144.2151, dependent, Internal Revenue Code 152, nonresident, part-year resident, allocation, 290.06 subdivision 2c paragraph e, taxable year, credit amount $2,000.