Minnesota taxpayers now are discovering that what works on their federal income tax returns doesn’t always work on state returns. There is an unusual disconnect between the two systems this tax season. In short, the federal government made sweeping changes that began in the 2018 tax year, and Minnesota’s government hasn’t yet coordinated with them as it has in the past.
The result? Minnesotan and their tax preparers now are dealing with numerous adjustments and some extra forms to undo those federal changes when filing state returns.
Minnesota didn’t change either of those basic allowances. So, a single individual can count on an automatic $6,500 deduction from income and a married couple receives a $13,000 standard deduction. Each person also is entitled to a personal exemption of $4,250.
On another schedule, Form M1NC, taxpayers must reconcile about 25 types of income or deductions that differ between state tax codes and the new federal law.
The phrase “For Minnesota purposes” is meaningful this year. Eric Buechler, owner of tax preparation firm EricJohn Ltd. can take on those differences between Minnesota and federal tax codes for you this season.