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Employers Transit Pass Credit
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If you are an employer who purchased transit passes to give or resell to your employees, you may qualify for a nonrefundable credit.
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To qualify, all of the following must be true:
- The transit passes are either passes, tokens, fare cards, vouchers, or similar items entitling a person to transportation at regular or reduced prices.
- Your employees use the passes in Minnesota.
- The transportation is provided by either of the following:
- A public or privately-owned mass transit facility
- A person in the business of transporting people for compensation or hire. The vehicle must have seating capacity for at least six adults not including the driver.
Individual Income Tax
If you are a sole proprietor:
- Complete Schedule ETP, Employer Transit Pass Credit.
- Enter the credit amount from Schedule ETP on Schedule M1C, Other Nonrefundable Credits.
- Include Schedule ETP and Schedule M1C when you file Form M1, Individual Income Tax.
Corporate Franchise Tax
If you are a C corporation:
- Complete Schedule ETP, Employer Transit Pass Credit.
- Enter the credit amount from Schedule ETP on Form M4T, Tax Calculation.
- Include Schedule ETP and Schedule M4T when you file Form M4, Corporate Franchise Tax Return.
Partnerships, S-Corporations, and Trusts
If you are a partner of a partnership, shareholder of an S corporation, or beneficiary of a trust:
- Your credit amount is found on your Schedule KPI, KS, or KF.
- Enter the credit amount from Schedule KPI, KS, or KF on Schedule M1C, Other Nonrefundable Credits.
- Include the applicable Schedule KPI, KS, or KF and Schedule M1C when you file Form M1, Individual Income Tax.
Fiduciary Income Tax
If you are an estate or trust:
- Include credits eligible outright by the estate or trust or received on Schedule KPI, KS, or KF as a partner, shareholder, or beneficiary of another entity.
- Enter the credit amount from Schedule KPI, KS, or KF on Form M2, Income Tax Return for Estates and Trusts.
- Include only the portion of the credits the estate or trust is retaining. Report any portion of the credits distributed to beneficiaries on the beneficiaries’ Schedules KF.
- Include the applicable Schedule KPI, KS, or KF when you file Form M2, Income Tax Return for Estates and Trusts.
The credit is 30 percent of the difference between what you paid and what you charged employees for the transit passes.
