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Last Updated: 3/26/2014

Differences In Above-the-Line Deductions

The American Taxpayer Relief Act (ATRA) extended some federal tax provisions allowing certain above-the-line deductions through 2013, and made others permanent. Minnesota has conformed to these provisions for tax year 2013 and beyond. (“Above-the-line” refers to expenses that are deducted before arriving at federal adjusted gross income.)

On March 21, 2014, Gov. Mark Dayton signed a bill that conformed Minnesota law to these federal provisions for tax years 2013 and going forward.  Prior to the bill being signed, taxpayers were required to include the difference between federal and state deductions amounts on Schedule M1NC, which is no longer used. The following information lists the changes affecting income items that result from this legislation.

View a detailed list of the acts and provisions extended by ATRA.  

Student Loan Interest Deduction

ATRA permanently extended provisions that expand the definition of qualified student loan interest to include:

  • Interest payments on a loan for which interest payments have been required for more than 60 months, and 

  • Interest payments made voluntarily

Minnesota has adopted these provisions meaning taxpayers do not need to adjust their student loan interest deduction for Minnesota purposes.

Phase-out of Student Loan Interest

ATRA permanently extended a provision that increased the MAGI for the student loan interest phase-out to between $60,000 and $75,000, and between $125,000 and $155,000 for married taxpayers filing a joint return.

Minnesota has adopted these increased phase-out ranges for Minnesota tax purposes.

Tuition and Fees Deduction

ATRA extended, through 2013, an above the line deduction of up to $4,000 for qualified higher education expenses.  Minnesota adopted this deduction.