State Income Tax Refund Subtraction


Minnesota does not tax your state income tax refund, but it may be subject to federal tax. If you reported a state refund on your federal return from the previous tax year, you may subtract this amount from your Minnesota taxable income.

To qualify for the subtraction, you must have reported a state income tax refund on one of these lines:

  • Line 1 of federal Schedule 1
  • Line 11 of Form 1040NR
  • Line 4 of Form 1040NR-EZ

You may not claim this subtraction if either of these apply:

  • You did not file a federal return
  • You did not include an amount on line 1 of federal Schedule 1

To claim the subtraction, check the state refund amount reported on your federal return from last year. Enter this amount on line 6 of your Minnesota income tax return (Form M1, Individual Income Tax).

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