MN HF74

Increases K-12 education expense subtraction limits from $1,625 to $2,600 for kindergarten through grade 6 and from $2,500 to $3,900 for grades 7 through 12, with annual inflation adjustments beginning in taxable year 2023.

Extends the K-12 education credit to include tuition and fees paid to attend qualifying schools, in addition to education-related expenses.

Increases the maximum education credit per family from $1,000 to $1,500 per qualifying child and raises the income threshold for the credit from $33,500 to $50,000.

Modifies the credit phaseout rate for one-child families from $1 reduction per $4 of income to $1 per $6 of income, and for two-or-more-child families from $2 per $4 to $1 per $3 of income over the threshold.

Requires annual inflation adjustments to both the credit amount and income threshold beginning in taxable year 2023, effective for taxable years beginning after December 31, 2022.