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View from Revenue: Season of change

Advocacy

Cynthia Bauerly, Minnesota Department of Revenue commissioner | April 2020 Footnote

Editor's note: Updated April 1, 2020

Editor’s note: This column was submitted before the tax filing deadline was delayed to July 15 because of the COVID-19 pandemic.

At the Minnesota Department of Revenue, we process about 3 million individual returns each year — and issue 2.2 million refunds — and many of these filers rely on your services. Your dedication, knowledge and hard work are crucial to our success.

We are committed to providing you with information, tools and other resources to help your clients meet their Minnesota tax obligations. Though this collaboration works every day, it is especially visible throughout tax season.

Filing season update

After big Minnesota tax law changes last May, we worked with tax preparers and software vendors to have the 2019 tax return ready for the filing season that began Jan. 27. The 2019 Minnesota tax bill made significant changes, including:
  • Shifting the starting point for the Minnesota individual income tax calculation to federal adjusted gross income.
  • Establishing a Minnesota-based Dependent Credit and expanding the Working Family Credit.
  • For business income, conforming to many of the provisions in the 2017 federal tax bill.
  • Some of these provisions were made retroactive for tax years 2017 and 2018.
As we were wrapping up these updates for the 2020 filing season, federal tax laws were changed again in December. The Further Consolidated Appropriations Bill of 2020 (P.L. 116-94) updated tax extenders, disaster tax relief, retirement plans and other areas of the federal tax code. These changes affect federal adjusted gross income.

To ensure a smooth filing season, Revenue updated our tax forms and systems to account for the fact that Minnesota law has not changed in response to the December federal changes. We also provided additional guidance for taxpayers and their representatives.
  • For tax year 2019, file Individual Income Tax returns as usual. Make sure to use the most current forms and instructions and to update your tax software, if needed.
  • If you amend a 2017 or 2018 federal return to benefit from the latest federal changes — or for any other reason — you must also amend the Minnesota return.
You can find the most-current forms and instructions at www.revenue.state.mn.us.

Legislative session

The 2020 legislative session began Feb. 11 and, while this is not a budgeting year, taxes are always part of the conversation at the Capitol.

As usual, the department has a tax policy and technical bill. While working with customers, we may notice things in the state tax code that should be clarified, updated or corrected. Many of these items may seem small, but it’s important to address them to keep our tax code as clear and effective as possible.

We shared our proposals and draft bill with stakeholders at a trio of discussions from November to January. I want to thank the MNCPA and its members who participated. We rely on your expertise and feedback to ensure we’re taking the right approach for all Minnesotans.
Revenue is here to support the work of the tax committees and the governor during the session, which ends by May 18. We will update you as soon as possible about any tax law changes and provide further guidance as needed after session.

Until then, we welcome feedback from the MNCPA and its members on how we can meet your needs and work together to improve our state tax system. Please let us know if you have an idea to help.

I also encourage you to subscribe to our email updates or follow us on social media to get the latest information about tax law changes, other news and opportunities to engage with us. Look under Connect With Us, at the bottom of revenue.state.mn.us, to get started.

Thank you for your partnership!

Cynthia Bauerly is commissioner of the Minnesota Department of Revenue.