Individual income tax; child credit marriage penalty eliminated and credit phaseout increased, and working family credit limited based on earned income to taxpayers with qualifying children.

HF 2197 modifies Minnesota's individual income tax credits to better support families. It eliminates the "marriage penalty" by raising the income threshold at which the child credit phases out from $35,000 (married filing jointly) to $75,000, and from $29,500 to $37,500 for other filers. The bill also restricts the Working Family Credit to taxpayers with qualifying children and adjusts credit amounts based on earned income. These changes apply to tax years beginning after December 31, 2024, with inflation adjustments starting in 2025. The bill directly affects Minnesota taxpayers with children who qualify for these credits.