March 10, 2010
Federal deduction for Haiti earthquake relief donations adopted
Minnesota has adopted the recently enacted federal law allowing individuals and C corporations to deduct qualifying cash donations on either their 2009 or 2010 income tax returns. For additional information, see Federal deduction for Haiti earthquake relief donations.
Federal net operating loss (NOL) provisions
The Minnesota legislature has not yet addressed the federal Worker, Homeownership & Business Assistance Act of 2009, which extends to 2009 the NOL carryback provisions for certain small businesses and expands the carryback periods to include businesses of all sizes. Since the Minnesota legislature has not addressed this federal legislation, amended Minnesota returns taking 2009 NOL’s back to prior years will not be accepted at this time. For additional information, see Net operating losses.
Nonresident spouses of active duty military members
The federal Military Spouses Residency Relief Act, which was signed into law on November 11, 2009, affects the Minnesota income tax filing requirements for spouses of military personnel, effective for tax year 2009. For complete information, see Military Spouses Residency Relief Act.
Claiming the federal first-time homebuyers credit
Individuals who purchased a new home in 2009 may choose to claim the first-time homebuyers credit on either their 2008 or 2009 federal tax return.
If the taxpayer chooses to file an amended 2008 federal return only to claim this credit, there is no need to amend their 2008 Minnesota return.
If the taxpayer chooses to claim the credit on their 2009 federal return, they must file paper returns for both federal and Minnesota.
Minnesota adopted the Roth conversion from a tax deductible IRA
In 2010, the income limits on converting to a Roth IRA are removed and taxpayers can elect to report the income in 2011 and 2012 (half in each year). For complete information, see federal Publication 590, available on the IRS website.
Recent corrections to Minnesota Form M1, Schedule M1M and M1 instructions
Tax preparers are required to provide their SSN, PTIN or VITA/TCE number in the signature area on Form M1. Do not enter your federal tax ID number.
The line 24 subtraction on Schedule M1M applies to federal active duty military pay received for services performed while a Minnesota resident, to the extent the income is federally taxable – regardless of where the services were performed.
Railroad Retirement Board income and reservation income must be included when calculating the lower income motor fuels tax credit. See Lower income motor fuels tax credit for complete information.
Corrected forms and instructions are available on our website at http://webprod/individ/pages/forms.aspx.
To receive a tax credit for military service in a combat zone or qualified hazardous duty area from Sept. 11, 2001 through Dec. 31, 2006, taxpayers must file a 2006 Form M99 before Oct. 15, 2010.
Members of the National Guard and Reserves are now allowed a subtraction for pay received for in-state training, meetings and drills. See line 25 of Schedule M1M.
For additional information, see What’s new for individuals for tax year 2009.