The Minnesota Senate approved the Omnibus Tax Bill (HF 3931) Wednesday on a 37-30 vote. All Republican senators and two Democrats voted against the bill, citing the burden it would place on struggling workers and businesses.
Here are the two education-related policy sections in the bill:
1. Student loan credit. Authorizes a refundable credit of up to $1,000 for students and their parents equal to a specified percentage of student loan payments in excess of 10 percent of adjusted gross income. An eligible individual is an individual with qualified education loans related to an undergraduate or graduate degree at a postsecondary institution. For the education undergraduate or graduate student or their parents, the percentage of payments eligible for the credit would be the 75 percent. Effective beginning in tax year 2016.
2. Reading credit. Makes permanent the temporary refundable reading credit authorized for families that a tax credit for a student who has dyslexia. The credit equals 75 percent of the amount of eligible expenses used to pay for tutoring and related expenses associated with treating dyslexia or other reading-based deficits for a qualifying child, up to $3,000.
There is also a big mandate in this tax bill because of the enhancement of family and medical benefits. The bill creates a mandatory 12-week unpaid leave to care for sick relatives for employees working for employers of 21 or more employees. The leave is modeled after the Federal Family and Medical Leave Act and is subject to most of the same rules as currently existing for state leave for pregnancy and bonding leave.
There are three types of benefits available. Those benefits are pregnancy benefits, bonding benefits, and family care benefits. Pregnancy benefits are paid for periods of medical conditions related to pregnancy. Bonding benefits are paid to adoptive, birth and foster parents for periods of bonding with a child. Family care benefits are paid for periods of care for a family member with a serious health condition. Pregnancy benefits are defined as medical benefits, and family care and bonding benefits are defined as family benefits.
Benefits are capped at a weekly amount by a tax on workers and employers, which would cost someone earning $50,000 around $45 per year. To be eligible for benefits an employee must have earned approximately $2,700 in wages.
Employees and employers will fund the benefits by paying taxes through the unemployment compensation tax collection structure. All employers with 21 or more employees subject to the unemployment law must pay taxes, as must employers who reimburse for unemployment benefits paid. Taxes will be adjusted annually based on the level of revenue needed to pay benefits and to administer the program. The program is scheduled to be operational beginning January 1, 2020.