Section 45F & DCFSA — Iron Range Employer Benefit Calculator
H.R. 1 One Big Beautiful Bill Act · Iron Range, Minnesota business profiles · 2026 tax rules · federal §162 + MN §162 conformity + hypothetical MN 45F credit
Iron Range business profile
Business inputs
Entity type:
32%
$28.0M
$1,400,000
$175,000
85%
Minnesota state tax
MN §162 conformity (current law): Minnesota corporate tax (9.8%) and individual income tax (up to 9.85%) start with federal taxable income, so the federal §162 deduction net of §45F credit reduction flows through to MN automatically.
HF 1563 (House) and SF 5177 (Senate) are pending bills that would create a MN employer child care credit. Both pending — neither has been folded into the omnibus tax bill yet, and markup is happening now. The House version benefits rural and smaller employers more directly; SF 5177 uses a competitive allocation system administered by DEED with annual aggregate and per-taxpayer caps that are blank in the bill text. Toggle either or both below to compare scenarios side-by-side.
Model bill versions:
100%
60%
DCFSA inputs
H.R. 1 raised the DCFSA limit from $5,000 to $7,500 effective Jan 1, 2026. Adoption is optional — employers must amend plan documents to offer the higher cap.
DCFSA cap:
15
$6,000
Layer-by-layer benefit
Layer 1: Section 45F credit credit50% rate · $600K cap
Layer 3: Minnesota §162 conformity MN deductionFederal deduction flows through to MN tax
Layer 4: MN state credit comparison pending bills · side-by-sideBoth bills mirror federal §45F · neither has §280C reduction
HF 1563 House
Effective tax years after Dec 31, 2024 · 5-year carryforward · auto-claimed on return · no aggregate cap
SF 5177 Senate
Effective tax years after Dec 31, 2026 · 5-year carryforward · DEED allocation certificate required · first-come, first-served
Layer 5: HF 1563 DCAP subtraction MN deduction · employee-side · House onlyMN income tax subtraction for DCAP above federal $7,500 cap · not in SF 5177
Layer 6: DCFSA employer FICA savings payroll7.65% on excluded wages