Navigate Up
Sign In
Last Updated: 12/27/2013

Penalties and Interest

The Minnesota Department of Revenue may assess penalties and interest when taxpayers do not comply with Minnesota tax laws

The table below shows penalties and interest we may assess for Individual Income Tax, when they apply, and the rate or amount for each type. View the statute (M.S. 289A.60).

​If you: We will assess: The rate or amount will be:
do not pay your tax due by April 15 (for most filers)​ Interest (rate is determined yearly)​ for 2014, 3% of the unpaid tax and penalty from the return due date until the tax is paid*​
do not pay your tax due by April 15 (for most filers)​
a Late Payment penalty**​ 4% of the unpaid tax within 180 days of the due date, after which an additional 5% penalty applies to any unpaid tax​
do not file your annual return by April 15​ a Late Filing penalty​ No penalty if you file your return by Oct. 15; 5% of any unpaid tax if you file after Oct. 15​
underpay your estimated tax and do not qualify for an exception***​
an Underpayment of Estimated Tax penalty or Additional Tax Charge (ATC)​ complete Schedule M15, Underpayment of Estimated Income Tax, to determine the amount of your penalty or ATC​
intentionally file a false or fraudulent return to claim a refundable credit****​ penalty for Fraudulently Claiming a Refundable Credit​ 50% of the fraudulently claimed refund plus 50% of any understated tax​

The Department of Revenue may assess additional penalties for failing to report all taxable income and for errors on returns made through intentional disregard of income tax instructions or laws.

Additional civil and criminal penalties may also apply for intentionally failing to file a Minnesota return, evading tax, and/or for filing a false or fraudulent return.

Abatement of Penalties

Penalties can be abated (cancelled) if circumstances beyond your control prevented you from filing or paying taxes on time.
 
If you receive a penalty notice and wish to request an abatement, send the department a letter within 60 days explaining the specific events or circumstances that prevented you from filing and/or paying on time.
 
We will notify you in writing whether your abatement request has been approved or denied. In general, abatement requests are denied unless the tax and interest have been paid in full.
 
For more information about abatement requests, view the Collection Division Manual.
For more information, see Penalty Information for Individuals.
 

*For 2013, 2012, 2011 and 2010, the rate was 3%.  For 2009, the rate was 5%. For previous years, go to Interest Rates.

**If you are unable to pay the full amount due, you can reduce your penalty and associated interest by filing your return and paying as much as you can. The department will send you a bill for the outstanding amount, after which you can request a payment plan online. Go to the Minnesota Department of Revenue Payment Agreement System.

***We will not assess a penalty or additional tax if you qualify for one of the following exceptions:

  • Your tax owed with the return (after subtracting withholding and credits) is less than $500.

  • Your withholding, refundable credits and your timely paid estimated tax equal at least 90% of your current year’s tax liability.

  • Your withholding, refundable credits and your timely paid estimated tax equal at least 100% of last year’s tax liability. However, if last year’s federal adjusted gross income was more than $150,000, use 110%.

  • You were a Minnesota resident for all 12 months of the previous year and your tax liability was zero.

  • You meet the IRS exceptions to the penalty. (You must include a copy of the federal request when you file your Form M1, Individual Income Tax Return; do not complete Schedule M15.)

****Refundable credits include the K-12 Education Credit, Working Family Credit, Child and Dependent Care Credit, and the Homestead Credit Refund (for Homeowners) and Renter's Property Tax Refund .