Day care costs paid by the taxpayer provided a subtraction.

HF 495 creates a new tax subtraction for Minnesota individual income taxpayers who pay for licensed child care. It allows taxpayers to subtract day care costs paid to licensed programs (like centers or family child care) from their taxable income, but only for amounts exceeding any dependent care benefits they already excluded from federal income tax. This change applies to taxable years beginning after December 31, 2024, and directly affects Minnesota taxpayers with qualifying child care expenses. The bill does not change existing federal tax rules but adds a state-level benefit for eligible costs.