SF5189

Purpose

This bill creates a new state income tax credit for contributions to women’s pregnancy centers. The credit is available to taxpayers who donate to qualifying centers, with a maximum credit of $50,000 per taxpayer per year. If the credit exceeds the taxpayer’s tax liability in a year, the unused amount carries forward to future years.

Main Provisions

• Credit amount and limit
  • Taxpayers may claim a credit equal to their contributions to a qualifying women’s pregnancy center, up to $50,000 per taxpayer per taxable year.
• Carryforward and spillover
  • If the credit is larger than the tax liability for the year, the excess can be carried forward to the next taxable year. The carryforward must be applied first in the following year and cannot exceed the taxpayer’s remaining tax liability.
• Interaction with other credits
  • An eligible taxpayer cannot claim the same contribution for the credit under section 297I.20 subdivision 8.
• Definitions
  • Women’s pregnancy center: An organization that provides information, referrals, and support to encourage and assist pregnant women to carry their pregnancies to term and to care for their children after birth.
  • Contribution: A charitable contribution deductible under the Internal Revenue Code (IRC) section 170, with specific references to how certain deductions under IRC 408(d)(8) are treated, and noting that IRC 170(b)(1)(G) applies regardless of the taxable year.
  • The credit cannot be claimed for amounts used to claim itemized deductions under Minnesota law (290.0122 subdivision 4) or for certain subtractions (290.0132 subdivision 7).
• Nonresidents and part-year residents
  • For nonresidents or part-year residents, the credit is allocated using the percentage established in Minnesota Statutes 290.06 subdivision 2c paragraph e.
• Pass-through entities
  • Credits awarded to partnerships, LLCs taxed as partnerships, S corporations, or multiple owners are passed through pro rata to each partner, member, shareholder, or owner based on their share of the entity’s assets or as otherwise allocated in organizational documents or other agreements, as of the last day of the taxable year.
• Administration and eligible centers list
  • The state Commissioner (in consultation with the Commissioner of Health) must maintain a list of qualifying women’s pregnancy centers to which contributions are eligible for the credit.

Significant Changes to Existing Law

• Introduces a new Minnesota tax credit specifically for contributions to women’s pregnancy centers, adding a distinct subsection to section 290 (tax credit framework) and amending related references in section 297I.20.
• Establishes a formal process to verify and maintain eligible centers via a centralized list maintained by the Revenue Department with input from the Health Department.
• Creates rules for how the credit interacts with other credits, how carryforwards work, and how credits are allocated to nonresidents/part-year residents and through pass-through entities.

Practical Impact (Plain-language Summary)

• If you donate to a qualifying women’s pregnancy center, you could reduce your state income tax by up to 50,000 dollars for that year.
• If your donation exceeds what you owe in state tax, you can use the remaining credit in future years until it’s exhausted.
• You cannot double-dip on the same donation by claiming another specific credit for that same amount.
• The government will define which centers qualify and keeps a public list of them.

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Relevant Terms credit for contributions women’s pregnancy center contribution Internal Revenue Code (IRC) 170 IRC 408(d)(8) IRC 170(b)(1)(G) carryover / carryforward nonresident part-year resident pass-through partnership LLC taxed as partnership S corporation pro rata list of qualifying centers commissioner of revenue commissioner of health itemized deduction subtraction 290.0122(4) 290.0132(7) 290.06(2c)(e)