MN HF2965

Allows eligible individuals and parents of eligible individuals a state income tax credit for student loan payments made during the taxable year, up to $5,000 per year.

Defines eligible individuals as those with qualified education loans for undergraduate or graduate degrees at postsecondary institutions eligible for state student aid or participating in the federal Pell Grant program.

Phases out the maximum credit by $1 for every $6 of modified adjusted gross income over $130,000 for married couples filing jointly, and by $1 for every $3 over $65,000 for all other filers.

Makes the credit refundable for Minnesota residents and part-year residents, with the commissioner refunding any excess credit above tax liability; nonresidents limited to their tax liability.

Appropriates sufficient funds from the general fund to pay refunds and is effective for taxable years beginning after December 31, 2015.