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Minnesota Tax

FULL List to Minnesota Tax Forms

Individual Income Tax

Form M1 Individual Income Tax 

Form M1 Individual Income Tax Printable

Form M1X Amended Minnesota Income Tax 

Form UT1 Individual Use Tax Return 

Corporate Income Tax

Form M8 S Corporation Return

Form M8X Amended S Corporation Return

Form M4 Corporation Franchise Tax Return

Sales Tax Forms

Form ST3 Certificate of Exemption

Property Tax Forms

Form M1PRX Amended Minnesota Property Tax Refund

Form M1PR 2011 Property Tax Refund

Form PV48 Amended Property Tax Refund Payment

When filing individual income taxes, it is important to be aware of the various types of Minnesota tax forms that exist. Examples of Minnesota tax forms include those for individual tax returns, working family credits, age 65 or older/disabled subtraction, amended income tax return payment, as well as a multitude of others.

Modifications and additions have also occurred in reference to individual filing, which will be highlighted below. Minnesota sales tax restrictions also present a significant area of interest as well as examination into lesser known taxes such as that of a “contamination tax.”

When filling out Minnesota tax forms, it is important to be cognizant of new classifications depending upon the year. As of recently, individuals will be permitted to deduct monetary donations for Haiti relief efforts on their Minnesota tax forms and income tax returns.

In addition, individuals serving in the National Guard as well as Reserves may now add on “training pay” when filling out specified portions of their Minnesota tax forms. Another addition in connection to the such a role in service of the country is that of the “Military Spouses Residency Relief Act.” This act sets forth that spouses of individuals on active duty be permitted to maintain their original state of residency despite their moving to reunite with their military spouse. This will be representative on Minnesota tax forms, especially when concerning specified areas concerning requirements for “nonresident spouses of military personnel.”

When attempting to calculate Minnesota sales tax, you must be aware of the fact that differing locales possess equally distinct taxes. In general, you may acquire an accurate deduction of local Minnesota sales tax by first putting together the state tax rate and the specific local rate. Following this application of this combination rate will be put towards the sales price, which is then eventually rounded up to the nearest cent. Every retailer is legally required to collect Minnesota sales tax.

Local sales taxes depend upon the parameters of the specific location or municipality, and will then vary upon leaving those aforementioned regions of interest. Exemptions from local Minnesota sales tax include presentations of “Certificates of Exemption,” shipping to customers outside of you local, selling of direct-to-home satellites that are only subject to state taxes. Those who do not incur any taxes whatsoever include federal government agencies and local governments such as cities and towns.

One example of a lesser known tax, in contrast to that of individual income taxes and Minnesota sales tax, is that of contamination tax. This tax encompasses all locales of Minnesota, and therefore, is identified as a state tax. It is applied to the “contamination value” of “real property.” It does not actually exist when concerning that of personal property, such as individual items that may be easily moved.

This value is acquired by assessing the reduction of the property’s value due to the existence of such contaminants. The contamination tax does not, however, make you eligible for property tax refunds since it is not classified as a property tax. Following adequate computations concerning the land and its pollutants, you will finally come to an appropriate contamination tax.


Minnesota Tax: An Overview

Minnesota is a state located in the Midwestern region of the United States, with a population of around 5.7 million. Like any other state, it has its own tax system, consisting of several taxes levied on different types of income, property, and transactions.

In this article, we will delve into the various taxes imposed by Minnesota, their rates, and their impact on the state’s residents and businesses. We will also highlight recent updates and changes in the tax system and how they affect taxpayers.

Minnesota Income Tax

The Minnesota Income Tax is a progressive tax, which means that individuals with a higher income pay a higher percentage of their income in taxes than those with lower incomes. The state has four income tax brackets, ranging from 5.35% to 9.85%.

The tax brackets for the tax year 2020 are as follows:

– 5.35% on the first $26,960 of taxable income for single filers and married couples filing separately;
– 6.8% on taxable income between $26,961 and $87,450 for single filers and married couples filing separately;
– 7.85% on taxable income between $87,451 and $164,400 for single filers and married couples filing separately; and
– 9.85% on taxable income over $164,400 for single filers and married couples filing separately.

For married couples filing jointly, the tax brackets are generally twice those for single filers, except for the top bracket, which starts at taxable income over $273,470.

The Minnesota Income Tax also allows deductions and credits that can lower the amount of taxes owed. Some of the commonly claimed deductions and credits include:

Federal Tax Deduction: Minnesota allows taxpayers to deduct their federal income tax paid from their Minnesota taxable income. This deduction is limited to $10,000 per year for married couples filing jointly and $5,000 for all other filers.

Dependent Exemptions: Taxpayers can claim a $4,450 exemption for each qualifying dependent they have. The exemption is gradually phased out for taxpayers with an adjusted gross income (AGI) above $276,900 for married couples filing jointly and $139,450 for all other filers.

Standard Deduction: Taxpayers who don’t itemize their deductions can claim a standard deduction that varies based on their filing status and income. For tax year 2020, the standard deductions are $12,400 for single filers and married couples filing separately, $18,650 for heads of household, and $24,800 for married couples filing jointly.

Special Credits: Minnesota offers various credits that can reduce the amount of taxes owed. These include the Working Family Credit, Child and Dependent Care Credit, and K-12 Education Credit, among others.

Minnesota Property Tax

The Minnesota Property Tax is a major source of revenue for local governments and the state. It is levied on the assessed value of real and personal property, which includes homes, commercial buildings, agricultural land, and personal belongings.

The property tax rate varies depending on the location of the property, the type of property, and the value of the property. Minnesota has a property tax system that is often referred to as a “”fiscal disparity”” system. This means that property owners in more economically prosperous areas pay a higher share of the tax burden than those in less prosperous areas.

The property tax rate is expressed as a percentage of the property’s assessed value, which is determined by the local assessor’s office. In most cases, the property tax is split into several components, including:

General Property Tax: This is the main property tax that funds local government operations and services, such as schools, roads, and parks.

Special Assessments: These are taxes levied on specific properties to pay for the cost of certain services or projects, such as road improvements or sewer systems.

Special District Taxes: These are taxes levied by special districts, such as fire districts, drainage districts, or library districts, to pay for specific services or facilities.

Minnesota Sales Tax

The Minnesota Sales Tax is a tax on retail sales of tangible personal property and certain services. The state imposes a sales tax of 6.875% on most taxable items, while cities and counties may impose additional local sales taxes of up to 2%.

Some of the items that are exempt from the sales tax include:

Food and clothing: Most food items and all clothing are exempt from sales tax in Minnesota.

Medical equipment: Items used to diagnose, treat, or prevent illness or disease are exempt from sales tax.

Prescription drugs: Prescription drugs and certain medical supplies are exempt from sales tax.

Nonprofits: Nonprofit organizations that qualify for tax-exempt status are exempt from sales tax on purchases made for their charitable purposes.

In addition to the regular sales tax, Minnesota also imposes a use tax on certain items purchased out of state that would have been subject to the sales tax if purchased in Minnesota. The use tax rate is the same as the sales tax rate and is generally paid by taxpayers on their income tax returns.

Minnesota Estate Tax

The Minnesota Estate Tax is a tax on the transfer of a deceased person’s property, also known as an estate. Minnesota is one of the 18 states that levy an estate tax, with the exemption threshold set at $3 million for tax year 2020.

The tax is imposed on the gross estate, which includes all of the deceased person’s assets, such as real estate, bank accounts, investments, and personal property, minus any debts and funeral expenses. The estate tax rate in Minnesota ranges from 13% to 16%, depending on the size of the estate and the relationship of the heirs to the deceased.

Minnesota Corporate Tax

The Minnesota Corporate Tax is a tax on the net income of corporations, including S-corporations, partnerships, and limited liability companies (LLCs) that elect to be taxed as corporations. The tax rate for the tax year 2020 is 9.8% on taxable income above $501,000.

Minnesota also imposes a Franchise Tax on corporations that are incorporated or do business in the state, regardless of whether they have taxable income. The Franchise Tax is based on the net worth of the corporation and ranges from $0 to $10,000, depending on the size of the corporation’s assets.

Recent Changes and Updates in Minnesota Tax Law

Over the years, Minnesota has made several changes to its tax system to keep up with changing economic conditions and tax policy trends. Here are some of the recent updates in Minnesota tax law:

Federal Tax Conformity

In 2019, Minnesota enacted a series of tax conformity measures to align its tax code with the federal tax code after major changes were made to the latter under the Tax Cuts and Jobs Act of 2017 (TCJA).

One of the significant changes was the increase in the federal standard deduction, which reduced federal taxable income for many taxpayers. However, this increase would have led to an increase in Minnesota taxable income for some taxpayers who itemize their deductions, effectively increasing their state tax liability.

To prevent this, Minnesota introduced a new deduction for taxpayers who claimed the federal standard deduction but still wanted to itemize their deductions on their state returns.

Working Family Credit

In 2019, the Minnesota Legislature approved an expansion of the Working Family Credit, a refundable credit for low- and moderate-income workers. The expansion increased the income thresholds for the credit, making more workers eligible for it and increasing the credit amounts for those who already qualified.

The expansion also included a new credit for residents who are not eligible for the federal Earned Income Tax Credit (EITC) due to their immigration status. This credit is available to taxpayers who have an Individual Taxpayer Identification Number (ITIN) instead of a Social Security Number.

Remote Seller Tax

In 2018, the U.S. Supreme Court issued a ruling in South Dakota v. Wayfair, Inc., which allowed states to collect sales tax from remote sellers, such as online retailers, that have no physical presence in the state.

Following the ruling, Minnesota implemented a Remote Seller Tax, requiring out-of-state sellers with sales of at least $100,000 or 200 transactions in Minnesota to collect and remit sales tax to the state, starting on October 1, 2018.

Conclusion

Minnesota Tax is a complex system that affects the lives of all its residents and businesses. Understanding the various taxes levied by the state, their rates, and the deductions and credits available can help taxpayers plan and manage their finances more effectively.

The state’s tax system has evolved over time, with recent changes aimed at aligning it with federal tax laws, expanding tax credits for low- and moderate-income workers, and collecting sales tax from remote sellers. These changes have significant implications for taxpayers, and it’s essential to stay informed about them to stay compliant and make the most of available opportunities.