The estate may pay the Minnesota estate tax in installments if all of the following conditions are met:
- The IRS, under Internal Revenue Code (IRC)sections 6161 or 6166, has granted the estate an extension of time to pay the federal estate tax,
- The Minnesota estate tax is $5,000 or more,
- The executor sends a letter to the department, no later than nine months after the decedent's date of death of the decedent, indicating the estate will pay the Minnesota tax in installments and the dates the payments will be made. (The dates must be the same as the dates on which the federal estate tax installments will be made.)
- The installments— not including interest owed — are made in equal amounts.
The installment payment plan is not available to estates with a federal gross value under the federal filing requirement.
Even if you pay the tax in installments, you must pay interest on any tax that remains unpaid after the regular due date. To determine the amount of interest to include with each installment, follow the steps in the M706 instructions.