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Last Updated: 12/10/2018

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.

Do I qualify for this subtraction?

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.

Who is a qualified beneficiary?

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.

What are eligible expenses?

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.

How much can individuals contribute to an account?

Individuals are limited to contributing $14,000 per year ($28,000 for married filing joint). Individuals cannot contribute more than $50,000 ($100,000 for married filing joint) total in all years. Each account is limited to a maximum of $150,000.

How much is this subtraction?

The amount is limited to the interest and dividends earned from the first-time homebuyer savings account.

How do I file this subtraction?

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

First-time Home Buyer Savings Account Additional Tax