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).