1.2relating to taxation; individual income; allowing a subtraction for health
1.3insurance premiums;amending Minnesota Statutes 2008, section 290.01,
1.4subdivision 19b.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6    Section 1. Minnesota Statutes 2008, section 290.01, subdivision 19b, is amended to
1.7read:
1.8    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
1.9and trusts, there shall be subtracted from federal taxable income:
1.10    (1) net interest income on obligations of any authority, commission, or
1.11instrumentality of the United States to the extent includable in taxable income for federal
1.12income tax purposes but exempt from state income tax under the laws of the United States;
1.13    (2) if included in federal taxable income, the amount of any overpayment of income
1.14tax to Minnesota or to any other state, for any previous taxable year, whether the amount
1.15is received as a refund or as a credit to another taxable year's income tax liability;
1.16    (3) the amount paid to others, less the amount used to claim the credit allowed under
1.17section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
1.18to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
1.19transportation of each qualifying child in attending an elementary or secondary school
1.20situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
1.21resident of this state may legally fulfill the state's compulsory attendance laws, which
1.22is not operated for profit, and which adheres to the provisions of the Civil Rights Act
1.23of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
1.24tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
2.1"textbooks" includes books and other instructional materials and equipment purchased
2.2or leased for use in elementary and secondary schools in teaching only those subjects
2.3legally and commonly taught in public elementary and secondary schools in this state.
2.4Equipment expenses qualifying for deduction includes expenses as defined and limited in
2.5section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
2.6books and materials used in the teaching of religious tenets, doctrines, or worship, the
2.7purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
2.8or materials for, or transportation to, extracurricular activities including sporting events,
2.9musical or dramatic events, speech activities, driver's education, or similar programs. For
2.10purposes of the subtraction provided by this clause, "qualifying child" has the meaning
2.11given in section 32(c)(3) of the Internal Revenue Code;
2.12    (4) income as provided under section 290.0802;
2.13    (5) to the extent included in federal adjusted gross income, income realized on
2.14disposition of property exempt from tax under section 290.491;
2.15    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
2.16of the Internal Revenue Code in determining federal taxable income by an individual
2.17who does not itemize deductions for federal income tax purposes for the taxable year, an
2.18amount equal to 50 percent of the excess of charitable contributions over $500 allowable
2.19as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and
2.20under the provisions of Public Law 109-1;
2.21    (7) for taxable years beginning before January 1, 2008, the amount of the federal
2.22small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
2.23which is included in gross income under section 87 of the Internal Revenue Code;
2.24    (8) for individuals who are allowed a federal foreign tax credit for taxes that do not
2.25qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
2.26of subnational foreign taxes for the taxable year, but not to exceed the total subnational
2.27foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
2.28"federal foreign tax credit" means the credit allowed under section 27 of the Internal
2.29Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
2.30under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
2.31the extent they exceed the federal foreign tax credit;
2.32    (9) in each of the five tax years immediately following the tax year in which an
2.33addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
2.34of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
2.35of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
2.36the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
3.1subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
3.2positive value of any net operating loss under section 172 of the Internal Revenue Code
3.3generated for the tax year of the addition. The resulting delayed depreciation cannot be
3.4less than zero;
3.5    (10) job opportunity building zone income as provided under section 469.316;
3.6    (11) to the extent included in federal taxable income, the amount of compensation
3.7paid to members of the Minnesota National Guard or other reserve components of the
3.8United States military for active service performed in Minnesota, excluding compensation
3.9for services performed under the Active Guard Reserve (AGR) program. For purposes of
3.10this clause, "active service" means (i) state active service as defined in section 190.05,
3.11subdivision 5a , clause (1); (ii) federally funded state active service as defined in section
3.12190.05, subdivision 5b ; or (iii) federal active service as defined in section 190.05,
3.13subdivision 5c , but "active service" excludes service performed in accordance with section
3.14190.08, subdivision 3 ;
3.15    (12) to the extent included in federal taxable income, the amount of compensation
3.16paid to Minnesota residents who are members of the armed forces of the United States or
3.17United Nations for active duty performed outside Minnesota under United States Code,
3.18title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of
3.19the United Nations;
3.20    (13) an amount, not to exceed $10,000, equal to qualified expenses related to a
3.21qualified donor's donation, while living, of one or more of the qualified donor's organs
3.22to another person for human organ transplantation. For purposes of this clause, "organ"
3.23means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
3.24"human organ transplantation" means the medical procedure by which transfer of a human
3.25organ is made from the body of one person to the body of another person; "qualified
3.26expenses" means unreimbursed expenses for both the individual and the qualified donor
3.27for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
3.28may be subtracted under this clause only once; and "qualified donor" means the individual
3.29or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
3.30individual may claim the subtraction in this clause for each instance of organ donation for
3.31transplantation during the taxable year in which the qualified expenses occur;
3.32    (14) in each of the five tax years immediately following the tax year in which an
3.33addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
3.34shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
3.35addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
3.36case of a shareholder of a corporation that is an S corporation, minus the positive value of
4.1any net operating loss under section 172 of the Internal Revenue Code generated for the
4.2tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
4.3subtraction is not allowed under this clause;
4.4    (15) to the extent included in federal taxable income, compensation paid to a service
4.5member as defined in United States Code, title 10, section 101(a)(5), for military service
4.6as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section 101(2);
4.7    (16) international economic development zone income as provided under section
4.8469.325 ; and
4.9    (17) to the extent included in federal taxable income, the amount of national service
4.10educational awards received from the National Service Trust under United States Code,
4.11title 42, sections 12601 to 12604, for service in an approved Americorps National Service
4.12program.; and
4.13(18) to the extent not deducted in computing or otherwise excluded from federal
4.14taxable income or used to compute the credit under section 290.0672, amounts paid
4.15during the taxable year for insurance as defined in section 213(d)(1)(D) of the Internal
4.16Revenue Code.
4.17EFFECTIVE DATE.This section is effective for taxable years beginning after
4.18December 31, 2008.