Income and corporate franchise tax provisions modified, and tax credit created for employer paid family leave.

This bill creates a tax credit for small businesses in Minnesota that pay family leave benefits to their employees. It allows qualified employers, defined as those with 50 or fewer employees, to claim a credit against their state income and corporate franchise taxes for money spent directly on paid family leave or paid to an insurance provider for such benefits. The credit is capped at $3,000 per employee and applies to leave taken for serious health conditions, bonding with a new child, or addressing military-related exigencies. The legislation also specifies how the credit is calculated for nonresidents and how it is distributed among partners or shareholders in business entities.