HF 633 Minnesota House · 2025-2026 Regular Session

Licensed in-home child care providers market value exclusion established.

HF 633 creates a tax credit for licensed in-home child care providers in Minnesota who operate family or group family day care programs from their home, including the house, garage, and one acre of land. The credit equals 50% of the net property tax on that portion of the property after subtracting other credits, directly benefiting eligible providers. Counties will identify qualifying providers and calculate the credit amount, with the state reimbursing local governments for the tax reductions in two annual payments starting in 2026. The credit applies to property taxes payable beginning in 2026.

Bill status in committee 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 13, 2025 Last action May 9, 2025

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What changed between versions

Introduction → 1st Engrossment · 4 edits · Feb 24, 2025

MODERATE

This bill was amended to change the benefit for licensed in-home child care providers from a tax credit to a market value exclusion. The primary change involves removing the new section establishing a credit and instead adding a new subdivision to the existing property tax statute that excludes 50% of the property's market value from taxation. This modification simplifies the calculation by integrating the benefit directly into the property valuation process rather than applying it as a separate credit against the tax bill.

Scope change

The scope of the benefit remains the same (licensed family and group family day care providers), but the mechanism for receiving the benefit changed from a post-tax credit to a pre-tax market value exclusion.

ELIGIBILITY

The benefit for licensed in-home child care providers was changed from a 'credit' to a 'market value exclusion,' meaning the property's value is reduced by 50% before calculating taxes instead of reducing the tax bill after calculation.

REQUIREMENT

The separate appropriation of funds to the commissioner of revenue and commissioner of education for reimbursing tax reductions was removed because the benefit is now a valuation exclusion that does not require state reimbursement.

TIMELINE

The effective date for the new benefit was adjusted from fiscal year 2027 to property taxes payable in 2026.

TECHNICAL

The bill was reorganized to add the new exclusion directly to Minnesota Statutes section 273.13, replacing the previous plan to create a new standalone section (273.1388).

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Key actions

Committee

Feb 24, 2025

Lower · Passed

Committee report, to adopt as amended and re-refer to Taxes

lower

Feb 13, 2025

Introduced

Introduction and first reading, referred to Children and Families Finance and Policy

lower

1 primary · 4 co-sponsors