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02/15/2024

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Department of Revenue will start reissuing over 128,000 expired one-time tax rebate checks next week

ST. PAUL, Minn. – The Minnesota Department of Revenue announced today that they will be reissuing over 128,000 one-time tax rebate checks that have gone uncashed and subsequently expired after their November and December issuance dates. The mailing of reissued checks will start next week and should be completed by mid-March.

What do the checks look like?

Unlike previously mailed checks, these will be mailed from the State of Minnesota. The checks are still protected by standard banking safeguards that help detect and deter fraud.

Is the one-time tax rebate taxable?

This rebate payment is not taxable on your Minnesota income tax return.

The Internal Revenue Service determined this rebate to be taxable on the federal return. Due to this decision, all rebate recipients were sent a Form 1099-MISC to use when filing their 2023 individual income tax returns. If you include this payment in your federal adjusted gross income, subtract it from Minnesota taxable income on line 33 of Schedule M1M and on line 10 of Form M1PR on your state returns.

What if an eligible taxpayer still has not received a rebate?

We will work with taxpayers who are eligible but did not get their rebate. If a taxpayer thinks they are eligible and didn’t receive a rebate by May 1, 2024, they should contact the department at 651-556-3000.

Get the latest news and updates from the Minnesota Department of Revenue by following the department on Facebook and X (formerly Twitter) or by signing up for our email subscription list.

02/09/2023

The following IRS Statement was issued by the IRS.

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IRS issues statement about the taxability of state payments
February 3, 2023

The IRS is aware of questions involving special tax refunds or payments made by states in 2022; we are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers. There are a variety of state programs that distributed these payments in 2022 and the rules surrounding them are complex. We expect to provide additional clarity for as many states and taxpayers as possible next week.

For taxpayers uncertain about the taxability of their state payments, the IRS recommends they wait until additional guidance is available or consult with a reputable tax professional. For taxpayers and tax preparers with questions, the best course of action is to wait for additional clarification on state payments rather than calling the IRS. We also do not recommend amending a previously filed 2022 return.

01/13/2023

The IRS will start accepting 2022 tax returns for Individual filers on January 23, 2023.

For most taxpayers April 18, 2023 is the due date when the 2022 is to be filed to avoid penalties and interest.

07/12/2021

Tax Law Changes
2021 Tax Bill Enacted July 1
Minnesota tax code changes were signed into law on July 1, 2021. The changes relate to unemployment compensation, Paycheck Protection Program (PPP) loan forgiveness, and other retroactive provisions affecting tax years 2018 through 2020.

Taxpayers do not need to do anything at this time.

Form and System Updates in Progress
We're updating Minnesota tax forms and working with tax software providers to update their systems to reflect these tax law changes. Do not file any amended returns relating to retroactive provisions in the tax bill until forms are updated. We will communicate when updated forms are available.

Unemployment Compensation and PPP Loan Forgiveness
If you filed a 2020 income tax return that included unemployment compensation or PPP loan forgiveness, wait to hear from us. Depending on your return’s complexity, we will either adjust it and issue you a refund, or we will ask you to amend your return. We'll let you know later this summer.

If we can adjust your return: We'll send you a letter describing what we changed and any refund you may receive as a result. We are committed to adjusting as many returns as we can.
If you need to amend: We'll send you a letter about amending your return. Do not file an amended return before hearing from us

06/22/2021

Q F3. What if I will claim a child on my 2021 tax return but did not claim that child on my 2020 tax return? (added June 14, 2021)


A3. Your first advance Child Tax Credit payments will be based on the children you claimed for the Child Tax Credit on your 2020 tax return (or 2019 tax return, if your 2020 tax return has not been processed as of the payment determination date for any of your monthly advance Child Tax Credit payments).

Later this year, the Child Tax Credit Update Portal (CTC UP) will be updated to allow you to inform us about the qualifying children you will claim on your 2021 tax return so that we can adjust your estimated 2021 Child Tax Credit – and therefore adjust the amount of your monthly advance Child Tax Credit payments.

If you do not receive advance Child Tax Credit payments for a qualifying child you will claim in 2021, you may claim the full amount of your allowable Child Tax Credit for that child when you file your 2021 tax return.

More details will be provided regarding CTC UP through these questions and answers once the portal is available. On IRS.gov website.

05/20/2021

RS Begins Correcting Tax Returns
Returns with unemployment compensation income exclusion

The IRS will begin issuing refunds this week to eligible taxpayers who paid taxes on 2020 unemployment compensation that the recently-enacted American Rescue Plan (ARP) later excluded from taxable income. These corrections are being made automatically in a phased approach. The first phase of adjustments is being made for single taxpayers who had the simplest tax returns, such as those filed by taxpayers who did not claim children or any refundable tax credits.

The IRS will issue refunds resulting from this effort by direct deposit for taxpayers who provided bank account information on their 2020 tax return. If valid bank account information is not available, the refund will be mailed as a paper check to the address of record. The IRS will continue to send refunds until all identified tax returns have been reviewed and adjusted.

These refunds are subject to normal offset rules, such as past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support or certain federal nontax debts (student loans). The IRS will send a separate notice to the taxpayer if the refund is offset to pay unpaid debts.

The IRS will send taxpayers a notice explaining the corrections, which they should expect within 30 days of when the correction is made. Taxpayers should keep any notices they receive for their records. Taxpayers should review their return after receiving their IRS notice(s).

Correction to any earned income credit (EIC) without qualifying children and the recovery rebate credit are being made automatically as part of this process. However, some taxpayers may be eligible for certain income-based tax credits not claimed on their original return, such as the EIC for their qualifying children. If so, they should file an amended tax return if the revised adjusted gross income amount makes them eligible for additional benefits.

More complex corrections will begin upon the completion of the first phase and involves couples filing as married filing jointly.

Unemployment compensation is taxable income. ARP excludes $10,200 in 2020 unemployment compensation from income used to calculate the amount of taxes owed. The $10,200 per person exclusion applies to taxpayers, single or married filing jointly, with modified adjusted gross income of less than $150,000. The $10,200 is the amount of income exclusion, not the amount of the refund. Refund amounts will vary and not all adjustments will result in a refund.

However, the IRS recently noted on the FAQ page that taxpayers living in a community property state, filing with a married filing separate status, report half of their unemployment compensation and half of their spouse's unemployment compensation on their respective tax returns. Taxpayers should exclude up to $10,200 on their respective tax return if their MAGI is less than $150,000. Neither spouse should exclude more than the amount of unemployment compensation reported on Schedule 1 (Form 1040), Line 7.

The legislation also suspends the requirement to repay excess advance payments of the premium tax credit (excess APTC). If a taxpayer paid an excess APTC repayment amount when they filed their 2020 return, the IRS is also refunding this amount automatically. If the IRS corrects the taxpayer’s account to reflect the unemployment income exclusion, the excess APTC amount that the taxpayer paid will be included in that adjustment. The IRS is also adjusting accounts for those who repaid excess APTC but did not report unemployment compensation on their 2020 tax return.

05/06/2021

The IRS is holding 29 million tax returns for manual processing, delaying tax refunds for many Americans, according to the National Taxpayer Advocate, an independent arm of the tax agency that looks out for consumers' interest. The delays are prompting some taxpayers to fret over social media about spending weeks waiting in limbo for their money.

Typically, the IRS sends most refunds within three weeks of taxpayers filing their return. But this year is complicated by several issues, including a backlog of 2019 paper tax returns that the IRS was unable to process after shuttering its offices during the coronavirus pandemic.

A recent notice from the IRS said that some people may experience a longer than average wait for their payments. That may especially impact tax returns that need a correction due to changes made by the Recovery Rebate Credit — a tax credit adjustment for people who were owed more stimulus money — or to verify income for the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC), according to the agency.

04/03/2021

Mar 31

IRS News: IRS to recalculate taxes on unemployment benefits; refunds to start in May

WASHINGTON – To help taxpayers, the Internal Revenue Service announced today that it will take steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan.



The legislation, signed on March 11, allows taxpayers who earned less than $150,000 in modified adjusted gross income to exclude unemployment compensation up to $20,400 if married filing jointly and $10,200 for all other eligible taxpayers. The legislation excludes only 2020 unemployment benefits from taxes.



Because the change occurred after some people filed their taxes, the IRS will take steps in the spring and summer to make the appropriate change to their return, which may result in a refund. The first refunds are expected to be made in May and will continue into the summer.



For those taxpayers who already have filed and figured their tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation and tax. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed.



For those who have already filed, the IRS will do these recalculations in two phases, starting with those taxpayers eligible for the up to $10,200 exclusion. The IRS will then adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns.



There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.

03/25/2021

Caution: The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable. For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance.

03/17/2021

How does the $10,200 tax waiver work?

As part of the American Rescue Plan, many taxpayers wouldn’t be required to pay taxes on up to $10,200 in unemployment benefits received last year. The exclusion is up to $10,200 of jobless benefits for each spouse for married couples.

So it's possible that if both lost work in 2020, a married couple filing a joint return might not have to pay federal income taxes on up to $20,400 in jobless benefits.

For households having income up to $150,000.

Talk to your Tax Professional if you have yet to file your taxes or if you will need to file an amended return.

Happy Tax Season!

03/10/2021

2020 tax-free unemployment benefits

Initially the bill didn’t include retroactive tax provisions, but during the Senate’s voting session, a compromise was made on unemployment benefits that will affect 2020 tax returns. The bill provides a $300 weekly federal unemployment benefit through Sept. 6 and also makes the first $10,200 of unemployment payments nontaxable ($20,400 in the case of a joint return, but only $10,200 per spouse) in 2020 for households earning less than $150,000.

02/27/2021

I have some clients that filed their tax return on the 12th of February and received their Federal and State refunds on the 22nd of February by direct deposit.

Address

9001 E Bloomington Freeway, Ste 119
Bloomington, MN
55420

Telephone

+19524060446

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