Minnesota Rebate Checks and Child Tax Credit in 2023

Minnesota rebate checks will be on the way to about 2.5 million Minnesota taxpayers after state lawmakers passed a $3 billion tax relief bill in May. Minnesota Gov. Tim Waltz has already signed the massive legislation, which also includes a child tax credit worth up to $1,750 per child dependent.

“There are really incredible, transformational things in this bill that will benefit people across the state,” said Minnesota Rep. Aisha Gomez. (District 62A), who sponsored the tax bill.

Minnesota Tax Relief: What to Expect 

Eligible Minnesotans will experience tax relief this year, beginning with the one-time direct payments of up to $1,300. 

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• The child tax credit of up to $1,750 per child is effective immediately. 
• Families can claim the credit in 2024 when they file their 2023 tax returns. 
• Language in the bill opens the possibility for advance payments. So, Minnesota families may receive a portion of the child tax credit this year. 

Will Minnesotans Receive a Rebate Check?

Under the bill, approximately 2.5 million Minnesotans will receive a rebate check. State lawmakers have said that eligible Minnesota families can expect to see checks worth up to $1,300 by this fall.

• Single filers making up to $75,000 will receive a payment of $260. 
• Joint filers making up to $150,000 will receive a payment of $520. 

Child dependents are also eligible for the one-time Minnesota rebate payments. The legislation allows families to receive an additional $260 for each dependent. Families can receive up to $1,300. This means that your rebate payment will not exceed $1,300, even if you have several dependent children. 

• Joint filers qualify for the full $1,300 with three child dependents.
• Single filers qualify for the full $1,300 with four qualifying children. 

Who doesn’t qualify for the Minnesota rebate check? The 2023 Minnesota rebate checks will be based on the 2021 tax year, so you must have been a state resident in 2021 to receive the payment. Additionally, if someone claimed you as a dependent on a 2021 tax return, you won't qualify for the rebate check. Instead, the person who listed you as a dependent in 2021 could receive a payment of $260.

What is the Minnesota Child Tax Credit for 2023?

Minnesota doesn't currently offer a child tax credit, but the legislation provides child tax credits of up to $1,750 per dependent. 

• Joint filers making less than $35,000 are eligible for the maximum $1,750 per dependent. 
• All other filers making less than $29,500 are eligible for the maximum $1,750 per dependent.
• Families exceeding the above income thresholds may still qualify for the child tax credit but could see a reduced amount. 

The state's child tax credit became effective the day after the bill became law. So, eligible Minnesotans can look forward to the refundable Minnesota child tax credit when they file their 2023 state tax returns. 

Additionally, language in the bill suggests that the Minnesota Commissioner of Revenue could establish a process for advance payments. That means Minnesota families might receive a portion of their child tax credit early instead of waiting for tax refunds.

What's in the 2023 Minnesota Tax Bill? 

As mentioned, the Minnesota tax bill includes a child tax credit and rebate checks. The rebate checks are based on tax year 2021 when pandemic-era stimulus payments and rebates were more common. 

Notably, Minnesota isn't the only state sending stimulus payments in 2023 or the only state increasing child tax credits. For example, New York also passed a budget that expanded the state's child tax credit to include children under 4 years of age. 

The Minnesota tax legislation includes other changes, too. 

• Some taxpayers can look forward to increased renters’ tax credits and property tax refunds. 
• The bill also eliminates income tax on Social Security benefits for single filers making less than $78,000. 
• However, a few tax increases include a reduction in allowable itemized deductions for taxpayers making more than $304,000.