Savings could be on the way for Minnesotans with student loan debt thanks to a proposed tax credit introduced on Monday by several Senate Republicans.
The bill is authored by Sen. Jeremy Miller of Winona and allows tax filers to claim a credit for payments on their student loan debt.
Miller said of the tax credit, lawmakers are always looking for ways to make higher education more affordable, but we should also work to help the folks who have already been through college and are struggling to pay back their student loans. This bill provides much-needed relief for thousands of Minnesotans.
Senate File 941 allows a refundable income tax credit of up to $1,000 for people paying more than ten percent of their income to student loans. The credit would be equal to a specified percentage of student loan payments, based on an individual's income level and their profession. For married couples, the taxpayer and spouse may each claim the credit.
A Department of Revenue analysis of a 2016 version of the bill reports that taxpayers could save $37.3 million in 2018 and $38.1 million in 2019. Similar language was included in the 2016 tax bill that passed the legislature with strong bipartisan support, but was later vetoed by the Governor.