Plain English Breakdown
The plain English breakdown is still being put together. The official documents below are already here.
SF5177 • 2026
Tax credit establishment for employer-provided child care expenses
Tax credit establishment for employer-provided child care expenses
Children
Labor
Taxes
Passed Legislature
This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.
Bill History
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2026-04-20
House
Introduction and first reading
Official Summary Text
Tax credit establishment for employer-provided child care expenses
Current Bill Text
Read the full stored bill text
A bill for an act relating to taxation; income and corporate franchise; establishing a tax credit for employer-provided child care expenses; proposing coding for new law in Minnesota Statutes, chapter 290. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. new text begin [290.0687] EMPLOYER-PROVIDED CHILD CARE CREDIT. new text end new text begin Subdivision 1. new text end new text begin Definition. new text end new text begin (a) For purposes of this section, the following terms have the meanings given. new text end new text begin (b) "Employer" has the meaning given in section 290.92, clause (4). new text end new text begin (c) "Internal Revenue Code" means the Internal Revenue Code as amended through July 4, 2025. new text end new text begin Subd. 2. new text end new text begin Credit allowed. new text end new text begin (a) An employer is allowed a credit against the taxes imposed under this chapter, subject to allocation under subdivision 3, equal to ..... percent of the amount of the credit allowed under section 45F of the Internal Revenue Code, except the credit under this section is limited to credits allowed based on qualified child care expenses or qualified child care resource and referral expenditures that were paid or incurred in Minnesota. new text end new text begin (b) For a taxpayer allowed a credit under section 45F of the Internal Revenue Code based partly on expenses paid or incurred outside of Minnesota, the credit under this section, subject to allocation under subdivision 3, equals ..... percent of the amount of the credit allowed federally that is attributable to expenses paid or incurred in Minnesota. new text end new text begin Subd. 3. new text end new text begin Allocation. new text end new text begin (a) To qualify for a credit under this section, a taxpayer must submit an application to the commissioner of employment and economic development for a credit in the form prescribed by the commissioner of employment and economic development in consultation with the commissioner of revenue. new text end new text begin (b) Upon approving an application for a credit that meets the requirements of this section, the commissioner of employment and economic development must issue an allocation certificate that verifies the taxpayer's eligibility for the credit, states the amount of credit, and states the taxable year in which the credit is allocated. new text end new text begin (c) The commissioner of employment and economic development must not issue allocation certificates for more than $....... of credits each year. The commissioner must not issue allocation certificates to a taxpayer in excess of $....... for each taxable year. If the entire amount is not allocated in a year, any remaining amount is available for allocation in following years until the entire allocation has been made. new text end new text begin (d) The director must allocate credits on a first-come, first-served basis. new text end new text begin Subd. 4. new text end new text begin Partnerships. new text end new text begin Credits granted to a partnership, a limited liability company taxed as a partnership, or an S corporation are passed through to the partners, members, or shareholders, respectively, pro rata to each partner, member, or shareholder based on the partner's, member's, or shareholder's share of the entity's assets or as specially allocated in the entity's organizational documents or any other executed agreement, as of the last day of the taxable year. new text end new text begin Subd. 5. new text end new text begin Carryover. new text end new text begin If the amount of the credit under this section exceeds the taxpayer's liability for tax under this chapter, the excess is a credit carryover to each of the five succeeding taxable years. The entire amount of the excess unused credit for the taxable year must be carried first to the earliest of the taxable years to which the credit may be carried and then to each successive year to which the credit may be carried. The amount of the unused credit that may be added under this subdivision may not exceed the taxpayer's liability for tax, less any credit for the current taxable year. new text end new text begin EFFECTIVE DATE. new text end new text begin This section is effective for taxable years beginning after December 31, 2026. new text end