2026 Tax Law Change FAQs For Businesses

No. Bonus depreciation for qualified production property (QPP) does not require an addition. 

All other bonus depreciation requires an 80% addition with a one-fifth subtraction in subsequent years.

(Published July 15, 2026)

No. You cannot transfer estimated payments between your individual tax and your pass-through entity’s business tax accounts. The individual taxpayer may seek a refund for any overpayment of individual income taxes when they file their 2026 Form M1, Individual Income Tax.

(Published July 15, 2026)

The pass-through entity cannot claim a refund if the partners or shareholders already claimed the PTE tax credit on their personal returns. The individual partners and shareholders will need to file Form M1X, Amended Minnesota Income Tax, to receive a refund of the overpayment.

The pass-through entity must amend their return using Form M3X, Amended Partnership Return Claim for Refund, or Form M8X, Amended S Corporation Return, and update the following schedules for conformity changes:

• Nonconformity schedules using Schedules KPCNC, KPINC, or KSNC for federal adjustments
• Any conformity-related changes to Schedules:
  • KPC, Partner’s Share if Income, Credits, and Modifications 
  • KPI, Partner’s Share if Income, Credits, and Modifications
  • KS, Shareholder’s Share if Income, Credits, and Modifications

Do not update the PTE tax credit on Schedules KS or KPI.

The pass-through entity should not amend Schedule PTE, Pass-through Entity Tax, unless the partners or shareholders have elected for the entity to satisfy their filing requirement through the PTE election. If this situation applies to the entity, do the following:

• Update amounts on Schedule PTE, Lines 1 through 16 and 24 through 29 and 31
• Do not update amounts on Schedule PTE, Lines 17 through 23 and 30
• Do not update Schedule PTE-RP, Pass-through Entity Tax for Resident Partners

(Published July 15, 2026)

The pass-through entity must amend their return using Form M3X, Amended Partnership Return Claim for Refund, or Form M8X, Amended S Corporation Return, and update the following schedules for conformity changes:

• Nonconformity schedules using Schedules KPCNC, KPINC, or KSNC for federal adjustments
• Any conformity-related changes to Schedules:
  • KPC, Partner’s Share if Income, Credits, and Modifications 
  • KPI, Partner’s Share if Income, Credits, and Modifications
  • KS, Shareholder’s Share if Income, Credits, and Modifications 

Update the composite tax amount on Schedules KS or KPI.

The pass-through entity would pay the additional composite tax due or receive a refund for overpayment of composite tax. 

(Published July 15, 2026)

The pass-through entity cannot claim a refund if the amount was deducted and withheld from the partnership or S-corporation, regardless of the owner has claimed the amount withheld. The individual partners and shareholders will need to file Form M1X, Amended Minnesota Income Tax, to receive a refund of the overpayment.

The pass-through entity must amend their return using Form M3X, Amended Partnership Return Claim for Refund, or Form M8X, Amended S Corporation Return, and update the following schedules for conformity changes:

• Nonconformity schedules using Schedules KPCNC, KPINC, or KSNC for federal adjustments
• Any conformity-related changes to Schedules:
  • KPC, Partner’s Share if Income, Credits, and Modifications 
  • KPI, Partner’s Share if Income, Credits, and Modifications
  • KS, Shareholder’s Share if Income, Credits, and Modifications

Do not update the nonresident withholding amount on Schedules KS or KPI.

(Published July 15, 2026)

Only C corporations must make an addition for 80% of the deduction claimed. C corporations are allowed a subtraction for one-fourth of the addition amount over the subsequent four taxable years. 

The Minnesota Tax bill conforms to domestic R&E expenditures for S corporations, partnerships, estates, trusts, or individuals.  

(Published July 15, 2026)

No. The Minnesota Tax bill did not include a subtraction for domestic R&E expenditures for S corporations, partnerships, estates, trusts, or individuals. The subtractions allowed to a C corporation would not be available once it converts to an S corporation.

(Published July 15, 2026)

Yes, for some taxpayers. The Minnesota tax bill updates the Internal Revenue Code conformity date to May 1, 2026, which incorporates federal treatment through this date into Minnesota law. The Minnesota tax bill decoupled from domestic R&E expensing for C corporations, but fully conformed to the federal treatment for partnerships, S corporations, estates, trusts, or individuals.   

(Published July 15, 2026)

Yes, but only for these taxpayers:

• Partnerships
• S corporations
• Estates
• Trusts
• Individuals

The Minnesota tax bill decoupled from domestic R&E expensing for C corporations, including the catch-up deduction for previously capitalized domestic R&E expenditures.

(Published July 15, 2026)