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Last Updated: 3/27/2014

Differences In Itemized Deductions

​The American Taxpayer Relief Act (ATRA) extended some federal tax provisions relating to itemized deductions through 2013. View a detailed list of the acts and provisions extended by ATRA.

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 M1SA, which is no longer used. The following information lists the changes affecting itemized deductions that result from this legislation.

Mortgage Insurance Premiums (Minnesota adopted this deduction)

ATRA extended a provision that allows taxpayers, whose income is below certain limits, to deduct the cost of premiums for insurance covering the mortgage on their qualified principal residence.

Enhanced Charitable Deduction for Contributions of Food Inventory (Minnesota adopted this deduction)

ATRA extended a provision that allows individual taxpayers to claim an enhanced charitable deduction for donations of food inventory as if they were a C-corporation. That is, they can deduct twice their basis in the food or deduct their basis plus one-half of the unrealized profit – whichever is less.

Enhanced Charitable Contributions of Real Property Made for Conservation Purposes (Minnesota adopted this deduction)

ATRA extended a provision that allows taxpayers to claim an enhanced deduction for a donation of interests in real property for conservation purposes. This provision allows the deduction up to 50 percent of AGI (rather than 20 percent or 30 percent); it also extends the carry-forward period for excess contributions.

Itemized Deduction Phase-Out (Minnesota did not adopt this deduction)

ATRA permanently repealed the phase-out of itemized deductions for taxpayers whose AGI is:

  • $250,000 or less for single filers

  • $275,000 or less for heads of household

  • $300,000 or less for married joint filers

The Minnesota phase-out affects taxpayers whose AGI exceeds $178,150, or $89,075 for married taxpayers who file separately.

Similar to tax years 2011 and 2012, this phase out will be calculated on Schedule M1M and the adjustment will be entered on line 2.