Tax Relief

Deal Brewing on Fast Tax Aid Calculation in Minnesota

Update: 12:26 p.m.

A Senate bill to protect Minnesota business loan recipients from a tax stroke was amended Tuesday to also help people who received unemployment benefits during the pandemic.

The unanimous revision by the Senate Tax Committee signals that a deal could be developed to enforce the expensive plan.

There is also talk of adding money – perhaps from a pot of federal aid – to help school districts expand the summer school for students who have fallen behind in a year marked by lost class time. This measure is a priority for Governor Tim Walz and the majority of the House’s DFL members.

The main feature of the Senate Act would mean that federal law loans on the payroll program would be tax-free for up to 100,000 businesses. Companies whose loans have been converted into grants have had to show that they spent much of the money keeping employees on payroll in the depths of COVID-19 restrictions.

The newly added provision would also prevent some tax payments owed by those claiming additional unemployment benefits of $ 600 per week.

Not all taxes owed on pandemic unemployment benefits would be removed. The current language would allow joint applicants to deduct up to $ 3,000 of that income from their taxable income and $ 1,500 for individuals. Some people received increased unemployment benefits of more than $ 10,000 or more under special federal regulations.

Even the limited provision would cost anywhere from $ 30 million to $ 50 million, according to impartial Senate personnel research.

The business interruption amounts to nearly $ 440 million.

Senator Ann Rest, DFL-New Hope, led the change and promoted the school action that has not yet been addressed.

“Children, workers and companies. So this bill can be, “said Rest.” What could be more bipartisan than that? “

There is an urgency as the tax return has started and schools need time to prepare for improved summer programs.

Senate Majority Leader Paul Gazelka, R-East Gull Lake, said Monday openly about providing the money for the summer school. But he didn’t commit to it.

Senate Tax Committee Chairperson Carla Nelson, R-Rochester, said tax legislation will continue to be revised over time. The next stop is the floor, where voting could take place on Thursday, but more likely next week.

“I think we have 67 senators focused on helping their constituents recover and that is my hope for the future,” said Nelson.

The house legislature has considered both tax measures. It is not clear where they might draw the line for business and worker relief.

Minnesota has a projected surplus of $ 1.6 billion, much of which will build in the current fiscal year. Every dollar spent now would have a significant impact on the next two-year budget that lawmakers must set this year.

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