Coerced Debt Subtraction
Taxpayers with federally taxable debt forgiveness income can subtract taxable coerced debt from their Minnesota tax return. Coerced debt is debt incurred in the victim’s name, and discharged by a court, because of:
- The use of their personal information without their knowledge or consent
- The use or threat of force, coercion, or similar means
- Economic abuse
Those eligible for the Coerced Debt Subtraction may also subtract taxable coerced debt from the income used to calculate their Homestead Credit Refund.
Consumer Enforcement Public Compensation Subtraction
Taxpayers who received federally taxable compensation from the consumer protection restitution account established during the 2025 legislative session can subtract the amount of that compensation from their Minnesota tax return. The amount that an eligible consumer receives as a distribution from this account is a subtraction.
Those eligible for the Consumer Enforcement Public Compensation Subtraction may also subtract this amount from the income used to calculate their Homestead Credit Refund.
Foreign Service Retirement Subtraction
Taxpayers who receive certain foreign service pension or retirement income may be eligible to reduce their income by their federally taxable distributions when completing their Minnesota tax return.
To qualify, the taxpayer must receive retirement income from either the Foreign Service Retirement and Disability System or the Foreign Service Pension System. A taxpayer contributes to these retirement programs while employed in the United States Foreign Service.
Service Employees International Union (SEIU) Stipend Payment Subtraction
Individual providers, also known as “Direct Support Workers,” represented by the collective bargaining agreement between the Service Employees International Union (SEIU) Healthcare Minnesota & Iowa and the State of Minnesota can reduce their income on their Minnesota tax return by any federally taxable stipend payment they received from the Minnesota Department of Human Services, per the terms of their union contract. These stipends include:
- One-time $1,000 incentive payments intended to address individual provider worker shortages.
- One-time $200 payments to offset potential costs for individual providers using a personal device to access federally mandated electronic visit verification (EVV).
Those eligible for the SEIU Stipend Payment Subtraction may also subtract this amount from the income used to calculate their Renter’s Credit and Homestead Credit Refund.
Limited Land Access Farmer
The Minnesota Beginning Farmer Tax Credit program was amended to repeal and replace the definition of “emerging farmer” with “limited land access farmer.” A limited land access farmer rents farmland for a term of three years or less from someone they are not related to, or rents from an incubator farm. Limited land access farmers will be eligible for a tax credit of 12%, as opposed to the 8% available to all other farmers.
