The following table and examples explain how your Minnesota residency affects your NOLs.
If |
And |
Then |
---|
You have an NOL in a year that you were not a Minnesota resident |
You carry the loss back or forward on your federal return to a year you were a Minnesota resident |
You may carry the loss back or forward to the same year as the federal return. See Residency Examples 1 and 2 below. |
You’re a Minnesota resident when the NOL occurs |
You carry the loss back or forward on your federal return to a year you were not a Minnesota resident |
You will lose the tax benefit of the loss for Minnesota purposes. See Residency Example 3 below. |
You’re a nonresident with an NOL from activities in Minnesota |
You have sufficient income from another state to offset the loss on your federal return |
You’ll have no loss for federal purposes and no loss for Minnesota purposes. See Residency Example 4 below. |
Residency Example 1
Denise was a California resident in 2019. She generated an NOL in 2019 and elected to carry it forward. She moved to Minnesota late in 2019 and was a full-year resident of Minnesota in 2020. Her 2020 federal tax return will include the 2019 NOL carryover, and the benefit will flow to her Minnesota return.
Residency Example 2
Theo was a Minnesota resident during 2019 and moved to California in 2020. He incurred an NOL in 2020 and carried it back to his 2019 federal return. Theo should amend his 2019 Minnesota return to claim a refund and report changes to federal taxable income because of his NOL.
Residency Example 3
Jade was an Iowa resident. She moved to Minnesota in 2020. She incurred an NOL in 2029 and carried it back to her 2018 and 2019 returns. Because she did not file Minnesota returns in 2018 or 2019, she receives no Minnesota benefit. Jade could elect to carry forward the losses on her federal return if she wants a Minnesota benefit.
Residency Example 4
Claire is an Iowa resident with the following income:
Wages |
$50,000 |
Interest income |
$10,000 |
Loss from a Minnesota partnership |
($5,000) |
Federal adjusted gross income |
$55,000 |
Although Claire has a loss from Minnesota activities, there is no NOL on her federal return for the year. She cannot use the loss for Minnesota purposes. Since there is no federal loss for that year, Claire is not allowed to carry the partnership’s loss to other years on her Minnesota return.