HF2860 Summary

• Creates the Minnesota long-term care savings plan administered by the Commissioner of Revenue, with a lifetime contribution maximum of $200,000 per participant (adjusted annually for inflation).

• Allows qualified individuals (those age 50+ paying long-term care insurance premiums or those incurring long-term care expenses) to make withdrawals from the plan to pay or reimburse long-term care expenses and insurance premiums.

• Imposes a 10 percent penalty on withdrawals by non-qualified individuals or for purposes other than spouse transfers, long-term care expenses, long-term care insurance premiums, or death of the participant.

• Provides an income tax subtraction of up to $2,000 for married couples filing jointly and $1,000 for other filers for contributions made to the plan and investment earnings, effective for taxable years beginning after December 31, 2013.

• Establishes that improperly withdrawn funds are taxable additions to income, and if a plan administrator is selected, creates a trust with the State Board of Investment having fiduciary responsibility for investment decisions.