Tax Breaks for Olympic Medalists, Teachers, Students, Homeowners

Teachers, students, homeowners and Olympic medal winners will benefit from the federal conformity tax bill advanced Wednesday, January 11, by the Senate Tax Committee.

According to Department of Revenue Commissioner Cynthia Bauerly, 35,000 college students will see a total of $4.3 million dollars in tax breaks for paying tuition. In addition, Bauerly said that 70,000 teachers will be able to deduct $3 million in taxes for purchasing classroom supplies. Homeowners refinancing their home would benefit from a total of $17 million dollars in tax reductions. Another $11.6 million dollars will be aimed at reducing taxes for 73,000 homeowners who pay mortgage insurance, Bauerly explained. And, Olympic winners will not pay income taxes on the medals earned.

Because Minnesota income taxes are based on the federal income tax filing, state legislators must decide whether the state should incorporate federal tax changes into state income calculations. According to bill author Roger Chamberlain, R-Lino Lakes, federal conformity will reduce state revenue by $21.7 million dollars the first fiscal year of compliance and $17 million dollars the second fiscal year.

"In order for us to open tax filing season on January 23rd and have our system updated for federal law, we need this bill to be passed very soon," Bauerly said.