First-Time Homebuyer Savings Account Subtraction

Anyone may establish or contribute to a first-time homebuyer savings account. The account holder may subtract the earned interest or dividends from their Minnesota taxable income. The subtraction is limited to the interest and dividends earned from the account.

You may qualify if you are an account holder of a first-time homebuyer savings account and you designate a qualified beneficiary. Any withdrawals from the account must be used for eligible expenses.

• A qualified beneficiary is the person or married couple designated by the account holder. The account holder may be a qualified beneficiary. Qualified beneficiaries must be Minnesota residents that have not had an ownership interest in a principal residence in the past three years. Also, the spouse of a married beneficiary cannot have an ownership interest in a home.
• Eligible expenses include the down payment on a single-family home, closing costs, cost of construction, or financing the construction of a single-family home.

Individuals may only contribute $14,000 per year ($28,000 for Married Filing Jointly). Individuals cannot contribute more than $50,000 ($100,000 for Married Filing Jointly) total in all years. Each account is limited to a maximum of $150,000. 

To determine your subtraction, complete Schedule M1HOME, First-Time Homebuyer Savings Account, to determine your subtraction.