Minnesota has adopted all of the Internal Revenue Code (IRC) changes made to “federal taxable income” from March 18, 2010, through April 14, 2011, effective the same date as the federal changes.
Several modifications that Minnesota did not conform to in the past were fully adopted or no longer apply at the federal level, beginning with tax year 2011. As a result, the following lines have been removed from the 2011 Schedule M4I:
Important note: Minnesota continues to require an 80 percent addback for bonus depreciation and section 179 expensing.
Factor Percentages Changed
The property and payroll factors on Schedule M4A have changed from 6.5 percent to 5 percent each, and the sales factor has changed from 87 percent to 90 percent. Effective for tax year 2011.
Schedule M15C Replaces EST
Beginning with tax year 2011, the name of the schedule used by C corporations to determine its additional charge for underpayment of estimated tax has changed and is now called Schedule M15C. The calculation remains the same. Pass-through entities will use Schedule EST.
JOBZ Exemption Clarifications
State law has clarified that only qualified businesses that have all of their property and payroll in a Job Opportunity Building Zone (JOBZ) may claim the JOBZ exemption. In addition, only the JOBZ qualified business can exclude zone property and payroll when determining the minimum fee.
Rounding is Required
Beginning with tax year 2011, corporations are required to round dollar amounts to the nearest whole dollar when completing the Form M4 and supporting schedules.