Individual income and corporate franchise taxes; subtraction for employer-provided dependent care assistance allowed, and tax credit for employer-provided child care expenses established.

HF 1563 allows Minnesota taxpayers to reduce their taxable income by up to $10,000 (for joint filers) or $5,000 (for others) for employer-provided dependent care assistance, based on federal tax rules. It also establishes a state tax credit for employers who pay for qualified child care expenses in Minnesota, matching the federal Section 45F credit but limited to expenses incurred within the state. The bill affects employers offering dependent care benefits and employees receiving them, directly changing how these costs are treated for state tax purposes. Both provisions take effect for tax years beginning after December 31, 2024.