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Frequently Asked Questions for Lenders
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K-12 Education Credit Assignment Program
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Before you participate in the K-12 Education Credit Assignment Program, read these frequently asked questions to learn more about the program requirements.
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Customers can use two types of lenders for K-12 Education Credit assignments:
A financial institution (a state or federally chartered bank, savings bank, savings association, or credit union)
A tax-exempt organization under section 501(c)(3) of the Internal Revenue Code
To qualify for this program, your customers must qualify to claim the K-12 Education Credit. To determine if they qualify for this credit, review these resources:
You must disclose to customers, in plain language, that:
- They have entered into a loan agreement, which must be in a written format
- They have given up their Minnesota income tax refund to pay for the loan
- The K-12 Education Credit will generate a refund equal to 75% of the amount paid for qualified expenses
- The assignable refund amount is limited to $1,500 per qualifying child in grades K-12
- You (the lender) will receive any refunds up to the assigned amount, and the customer will only receive the amount of refunds exceeding that amount
You must also disclose to customers:
- The cost of each product or service for which the vendor separately charges the customer
- Any fees charged to the customer for tax preparation services
- Information on available free tax preparation services
If your customer’s Minnesota income tax return results in a refund, we will send payments through our e-Services system after we process the customer’s return.
If the return results in a refund, we will use it for these items before paying you:
- Delinquent tax obligations owed to the state
- Revenue recapture claims filed against your customer
- Other loan assignments based on the order we received them
Send a letter to notify us and include the customer’s name and Social Security Number. Mail to:
Minnesota Department of Revenue
P.O. Box 67774
St. Paul, MN 55146-0774