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2021 What's New for C Corporations
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For taxpayers affected by federal law passed after December 31, 2018.
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Under current law, definitions used in determining Minnesota taxable income are based on the Internal Revenue Code, as amended through December 31, 2018, with certain exceptions. Since that date, Congress has enacted the following significant acts:
- Taxpayer Certainty and Disaster Tax Relief (TCDTR) Act of 2019
- Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019
- Families First Coronavirus Response Act (FFCRA) of 2020
- Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020
- Taxpayer Certainty and Disaster Tax Relief (TCDTR20) of 2020
- COVID-related Tax Relief Act (COVIDTRA) of 2020
- American Rescue Plan Act (ARPA) of 2021
These acts contain changes affecting C-corporations for tax year 2021. A bill signed into law on July 1, 2021, conforms Minnesota law to certain provisions from these federal acts.
Because Minnesota has not adopted certain federal changes, adjustments are required to correctly determine your Minnesota taxable income. Use Schedule M4NC to calculate nonconformity adjustments relating to these acts.
The tax bill clarified that for taxable years beginning after December 31, 2019, no Section 179 addition is required for any taxpayer. The full Section 179 conformity includes specific language clarifying that no addition is needed for:
- Carryover amounts for property placed in service in taxable years beginning before January 1, 2020
- Property placed in service before January 1, 2020, by a partnership or S corporation filing on a fiscal year with a partner or shareholder filing on a calendar year
This clarification is effective retroactively for taxable years beginning after December 31, 2019.
