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Last Updated: 10/4/2016

Penalties and interest

​Penalties

Late payment

If you're not paying estate tax in installments, a 6 percent late payment penalty will be assessed on any tax not paid by the regular due date. If you file your return after the due date with a balance due, an additional 5 percent penalty will be assessed on the unpaid tax.
To avoid a late payment penalty, you must pay at least 90 percent of the total Minnesota estate tax by the regular due date and file Form M706 and pay the remaining tax due no later than 15 months after the decedent's death (six months after the regular due date).
 
Federal extension for paying tax

If you received an extension to pay federal estate tax or you have properly elected to pay federal estate tax in installments, you will not be assessed a late payment penalty on any Minnesota tax not paid by the regular due date. Attach to your Minnesota return a copy of the federal approval for extending payment of tax.

Late filing

If you file the return after the regular or extended due date, a 5 percent late filing penalty will be assessed on the unpaid tax.
 
Criminal penalties also apply if you willfully fail to file a return in order to evade paying the tax, or if you file a fraudulent return in order to evade paying all or part of the tax.
 

Interest

Interest is calculated as simple interest and accrues on unpaid tax and penalties beginning nine months from the decedent's date of death. Interest will be charged even if the deadline for filing the return has been extended or the tax is being paid under an installment plan.
The rate of interest may change from year to year (see interest rates).