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Section 179 Expensing Addition

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Section 179 expensing lets businesses deduct the entire cost of certain equipment on their federal tax return in the year of purchase (instead of deducting depreciation over multiple years). Minnesota limits this expensing on your state return to the amount allowable in 2003, when the federal limits first increased. You may need to add back part of your federal deductions for section 179 expensing.

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Do I need to make this addition? [+]

If you claim federal section 179 expensing exceeding Minnesota’s limits, you must add back 80 percent of the difference on your state return for that year.

What are Minnesota’s limits on section 179 expensing?

Minnesota caps section 179 expensing at $25,000 in the year of purchase, with an investment limit of $200,000. The limits apply first at the entity level and then flow through to shareholders or partners. The limits also apply at the individual level. For more information, see Examples 1 and 2 below.

Example 1 — Sole Proprietor (for Minnesota residents and nonresidents)

Example 2 – Sole Proprietor (with Schedule M1NC adjustment)

What is the amount of my addition? [+]

How do I report this addition? [+]

Contact Info

Email

Contact form

Phone [+]

Questions

651-296-3781
800-652-9094

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Address [+]

Mail your income tax return to:

Minnesota Department of Revenue
Mail Station 0010
600 N. Robert Street
St. Paul, MN 55145-0010

Mail your property tax refund return to :

Minnesota Department of Revenue
Mail Station 0020
600 N. Robert Street
St. Paul, MN 55145-0020

Mail your tax questions to:

Minnesota Department of Revenue
Mail Station 5510
600 N. Robert Street
St. Paul, MN 55146-5510

Street address (for deliveries):
Minnesota Department of Revenue
Individual Income Tax
600 North Robert Street
St. Paul, MN 55101

Returns and payments may be placed in the night deposit box located in front of our building.

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Last Updated

May 30, 2019