COVID-19 FAQs for Individuals

Does the reason I'm in Minnesota affect if I need to file a state Individual Income Tax for tax year 2020?  What if I'm in Minnesota due to COVID-19?

Generally, no. Minnesota full-year and part-year residents are required to file a Minnesota income tax return if their income meets the state’s minimum filing requirements. The filing requirement is the same even if you are in Minnesota due to COVID-19, except for:  

• Military members and their spouses stationed in Minnesota

• Individuals covered by income tax reciprocity agreements

For details, see Who Must File an Income Tax Return and Residents (Determining Residency).  

I’m temporarily telecommuting due to COVID-19. Will my Minnesota Individual Income Tax filing requirement for tax year 2020 be affected? 

It depends if you're a Minnesota resident, part-year resident, or nonresident.

• Minnesota residents: Your income tax filing requirements will not change solely because of telecommuting.

• Nonresidents or part-year residents: You may need to apportion your income based on the number of days you work from home. Nonresidents need to divide the number of days worked in Minnesota by the total number of days worked.

 For more information, see: 

• Income Tax Fact Sheet 1, Residency
• Income Tax Fact Sheet 2, Part-Year Residents
• Income Tax Fact Sheet 3, Nonresidents

What if I underpay or cannot pay my tax by the due date?

Can I reschedule a payment if I need more time to pay?

Yes. We recognize the COVID-19 situation may cause financial challenges. If you do not need extra time, we encourage you to file and pay as soon as possible to help support our state's response to COVID-19.

If you need to reschedule a payment, follow the instructions below, based on how your payment was originally scheduled.

• Through our website: Go to the e-Services Payment System and select View or Cancel a Payment, by 5 p.m. Central Time on the scheduled payment date. Cancel your original payment. Then schedule a new payment through the system as you normally would.

• Through your tax software: Call us at 651-296-3781 or 1-800-652-9094 (toll-free) to cancel your original payment, at least three business days before the scheduled payment date. Then schedule or make a new payment by another method. For options, see Make a Payment.

If my child is distance learning, can I claim internet access costs – including a hotspot and data plan – for the K-12 Education Credit or Subtraction?

Internet service or access charges do not qualify. Hardware needed for internet access – such as hotspots, modems, and routers – qualify under certain limits.

For more information, see Qualifying Expenses.

I purchased a tablet for each of my children and a modem/router for distance learning. Can I claim this equipment for the K-12 Education Credit or Subtraction?

Yes. Personal computer-related hardware expenses qualify including a tablet, modem, or router. You may claim up to $200 for the subtraction and – if you meet income requirements – $200 for the credit. 

For more information, see K-12 Education Subtraction and Credit.

Coronavirus Relief Fund (CRF) Payments from Local Governments

If local governments distribute CRF aid to individuals or families as emergency financial assistance, is it taxable income?

It is gross income to the recipient unless an exclusion or exemption applies. Because a tax exclusion or exemption was not provided by the CARES Act or state law for these payments, state and federal tax treatment will be determined by the IRS under existing law.

The Internal Revenue Code allows an exclusion for certain “disaster relief payments” to individuals. The COVID-19 pandemic was declared a federal disaster on March 13, 2020. If the assistance qualifies, it can be excluded. For details, see IRS Publication 3833 about disaster relief.

COVID-19 Economic Impact Payments

Are COVID-19 stimulus payments taxable?

No. COVID-19 Economic Impact Payments are not required to be paid back, and they are not included in the calculation of:

• Federal income
• Minnesota income
• Income for Minnesota’s property tax refund

For more information, see the IRS Economic Impact Payment Information Center.

Can I update my direct deposit information with you for my COVID-19 payment?

No. The IRS will issue COVID-19 Economic Impact Payments directly to individuals who qualify. The payment amount and method (check or direct deposit) will be based on your most recent federal tax return.

The Minnesota Department of Revenue does not have a role in issuing these or other federal payments.

Note: The IRS is providing a way to track your payment and update your direct deposit information with them. For details, see Economic Impact Payments on the IRS website.

Unemployment Compensation

Does Minnesota match the federal provision for excluding up to $10,200 in unemployment compensation from adjusted gross income?

No. Under current law, you must include any unemployment compensation benefits received in 2020 in Minnesota adjusted gross income. We will update our guidance if state law is changed.

If you excluded any unemployment compensation on your federal return, you must add it back on your Minnesota return:

• Report the federally excluded amount on line 7 of Schedule M1NC, Federal Adjustments.
• Include the amount in your total unemployment compensation on line C of Form M1, Individual Income Tax.

Are the additional weekly Federal Pandemic Unemployment Compensation payments included in Minnesota adjusted gross income?

Yes. Under current law, all unemployment insurance payments are taxable income in Minnesota or an individual's state of residence. We will update our guidance if state law is changed.

Are state or federal taxes taken out of the additional weekly payment?

No. For the latest information, go to the Minnesota Unemployment Insurance website (under "How do I get paid?").

If you do not have taxes withheld or pay estimated tax, you may owe more income tax than expected for 2020. You may also owe penalties and interest. For more information, see Estimated Tax.

Will the department start new enforced collection actions, such as levies and other seizures, during this pandemic?

Recognizing the financial impact of COVID-19, we have temporarily stopped issuing new:

• Levies from bank accounts, wages, or other income

• Professional license revocations

• Sales tax permit revocations

• Seizures of property

We may continue to take other actions to collect tax debts or other debts referred to the department. See Collection Information for details.

Minnesota law generally conforms to the Internal Revenue Code, as amended through December 31, 2018. Under current Minnesota law, forgiven PPP loan amounts and related expenses are treated as described below. We will be updating and adding new FAQs as needed going forward.

Is the Paycheck Protection Program (PPP) loan forgiveness taxable?

Yes, PPP loan forgiveness is taxable by Minnesota.

When is the Paycheck Protection Program (PPP) loan forgiveness taxable? 

PPP loan forgiveness is taxable in the tax year the PPP loan is forgiven.

Can I deduct business expenses paid with Paycheck Protection Program (PPP) loans?

No. There is no adjustment on the Minnesota income tax returns for expenses paid with a PPP loan.

Will I receive a federal Form 1099-C reporting debt forgiveness for Paycheck Protection Program (PPP) loans?

Possibly. The IRS instructs lenders to not issue Form 1099s when reporting debt forgiveness for PPP loans (see IRS Announcement 2020-12). If you had PPP loan debt forgiven, you must report that debt forgiveness income on your Minnesota income tax return even if you do not receive a Form 1099-C.