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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. The credit is 30% of the difference between what you paid and what you charged employees for the transit passes.
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To qualify, all of these 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:
- A public or private mass transit facility
- A person in the business of transporting people for compensation. 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, Corporation 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:
- Find the credit amount 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.
