1.1 A bill for an act
1.2 relating to taxation; individual income and corporate franchise; providing for
1.3 certain conformity to federal tax provisions; amending Minnesota Statutes 2022,
1.4 sections 289A.02, subdivision 7; 289A.08, subdivisions 7, 7a; 290.01, subdivisions
1.5 19, 31, by adding a subdivision; 290.0123, subdivision 3; 290.0131, by adding
1.6 subdivisions; 290.0132, by adding subdivisions; 290.0133, by adding a subdivision;
1.7 290.0134, by adding a subdivision; 290.06, subdivision 2c; 290.0671, subdivision
1.8 1a; 290.0675, subdivision 1; 290.091, subdivision 2; 290.095, subdivision 11;
1.9 290A.03, subdivision 15; 291.005, subdivision 1; repealing Minnesota Statutes
1.10 2022, section 290.0111.
1.11BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.12 Section 1. Minnesota Statutes 2022, section 289A.02, subdivision 7, is amended to read:
1.13 Subd. 7.Internal Revenue Code.Unless specifically defined otherwise, "Internal
1.14Revenue Code" means the Internal Revenue Code of 1986, as amended through December
1.1531, 2018 December 15, 2022.
1.16 EFFECTIVE DATE.This section is effective the day following final enactment, except
1.17the changes incorporated by federal changes are effective retroactively at the same time the
1.18changes were effective for federal purposes.
1.19 Sec. 2. Minnesota Statutes 2022, section 289A.08, subdivision 7, is amended to read:
1.20 Subd. 7.Composite income tax returns for nonresident partners, shareholders, and
1.21beneficiaries.(a) The commissioner may allow a partnership with nonresident partners to
1.22file a composite return and to pay the tax on behalf of nonresident partners who have no
1.23other Minnesota source income. This composite return must include the names, addresses,
1Sec. 2.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT
1
Printed
Page No.State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 31
NINETY-THIRD SESSION
Authored by Gomez, Lislegard, Youakim, Norris, Bahner and others01/04/2023
The bill was read for the first time and referred to the Committee on Taxes
Adoption of Report: Amended and re-referred to the Committee on Ways and Means01/05/2023
Adoption of Report: Placed on the General Register as Amended01/09/2023
Read for the Second Time
R/S Rules Suspended, urgency declared
Read for the Third Time
Passed by the House and transmitted to the Senate 2.1Social Security numbers, income allocation, and tax liability for the nonresident partners
2.2electing to be covered by the composite return.
2.3 (b) The computation of a partner's tax liability must be determined by multiplying the
2.4income allocated to that partner by the highest rate used to determine the tax liability for
2.5individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard
2.6deductions, or personal exemptions are not allowed.
2.7 (c) The partnership must submit a request to use this composite return filing method for
2.8nonresident partners. The requesting partnership must file a composite return in the form
2.9prescribed by the commissioner of revenue. The filing of a composite return is considered
2.10a request to use the composite return filing method.
2.11 (d) The electing partner must not have any Minnesota source income other than the
2.12income from the partnership, other electing partnerships, and other qualifying entities
2.13electing to file and pay the pass-through entity tax under subdivision 7a. If it is determined
2.14that the electing partner has other Minnesota source income, the inclusion of the income
2.15and tax liability for that partner under this provision will not constitute a return to satisfy
2.16the requirements of subdivision 1. The tax paid for the individual as part of the composite
2.17return is allowed as a payment of the tax by the individual on the date on which the composite
2.18return payment was made. If the electing nonresident partner has no other Minnesota source
2.19income, filing of the composite return is a return for purposes of subdivision 1.
2.20 (e) This subdivision does not negate the requirement that an individual pay estimated
2.21tax if the individual's liability would exceed the requirements set forth in section 289A.25.
2.22The individual's liability to pay estimated tax is, however, satisfied when the partnership
2.23pays composite estimated tax in the manner prescribed in section 289A.25.
2.24 (f) If an electing partner's share of the partnership's gross income from Minnesota sources
2.25is less than the filing requirements for a nonresident under this subdivision, the tax liability
2.26is zero. However, a statement showing the partner's share of gross income must be included
2.27as part of the composite return.
2.28 (g) The election provided in this subdivision is only available to a partner who has no
2.29other Minnesota source income and who is either (1) a full-year nonresident individual or
2.30(2) a trust or estate that does not claim a deduction under either section 651 or 661 of the
2.31Internal Revenue Code.
2.32 (h) A corporation defined in section 290.9725 and its nonresident shareholders may
2.33make an election under this paragraph. The provisions covering the partnership apply to
2.34the corporation and the provisions applying to the partner apply to the shareholder.
2Sec. 2.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 3.1 (i) Estates and trusts distributing current income only and the nonresident individual
3.2beneficiaries of the estates or trusts may make an election under this paragraph. The
3.3provisions covering the partnership apply to the estate or trust. The provisions applying to
3.4the partner apply to the beneficiary.
3.5 (j) For the purposes of this subdivision, "income" means the partner's share of federal
3.6adjusted gross income from the partnership modified by the additions provided in section
3.7290.0131, subdivisions 8 to 10, 16, and 17, and the subtractions provided in: (1) section
3.8290.0132, subdivisions 9, 27, and 28, and 31, to the extent the amount is assignable or
3.9allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14. The
3.10subtraction allowed under section 290.0132, subdivision 9, is only allowed on the composite
3.11tax computation to the extent the electing partner would have been allowed the subtraction.
3.12 EFFECTIVE DATE.This section is effective for taxable years beginning after December
3.1331, 2022.
3.14 Sec. 3. Minnesota Statutes 2022, section 289A.08, subdivision 7a, is amended to read:
3.15 Subd. 7a.Pass-through entity tax.(a) For the purposes of this subdivision, the following
3.16terms have the meanings given:
3.17 (1) "income" has the meaning given in subdivision 7, paragraph (j), modified by the
3.18addition provided in section 290.0131, subdivision 5, and the subtraction provided in section
3.19290.0132, subdivision 3, except that the provisions that apply to a partnership apply to a
3.20qualifying entity and the provisions that apply to a partner apply to a qualifying owner. The
3.21income of both a resident and nonresident qualifying owner is allocated and assigned to
3.22this state as provided for nonresident partners and shareholders under sections 290.17,
3.23290.191, and 290.20;
3.24 (2) "qualifying entity" means a partnership, limited liability company, or S corporation
3.25including a qualified subchapter S subsidiary organized under section 1361(b)(3)(B) of the
3.26Internal Revenue Code. Qualifying entity does not include a partnership, limited liability
3.27company, or corporation that has a partnership, limited liability company other than a
3.28disregarded entity, or corporation as a partner, member, or shareholder; and
3.29 (3) "qualifying owner" means:
3.30 (i) a resident or nonresident individual or estate that is a partner, member, or shareholder
3.31of a qualifying entity; or
3.32 (ii) a resident or nonresident trust that is a shareholder of a qualifying entity that is an
3.33S corporation.
3Sec. 3.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 4.1 (b) For taxable years beginning after December 31, 2020, in which the taxes of a
4.2qualifying owner are limited under section 164(b)(6)(B) of the Internal Revenue Code, a
4.3qualifying entity may elect to file a return and pay the pass-through entity tax imposed under
4.4paragraph (c). The election:
4.5 (1) must be made on or before the due date or extended due date of the qualifying entity's
4.6pass-through entity tax return;
4.7 (2) may only be made by qualifying owners who collectively hold more than a 50 percent
4.8ownership interest in the qualifying entity;
4.9 (3) is binding on all qualifying owners who have an ownership interest in the qualifying
4.10entity; and
4.11 (4) once made is irrevocable for the taxable year.
4.12 (c) Subject to the election in paragraph (b), a pass-through entity tax is imposed on a
4.13qualifying entity in an amount equal to the sum of the tax liability of each qualifying owner.
4.14 (d) The amount of a qualifying owner's tax liability under paragraph (c) is the amount
4.15of the qualifying owner's income multiplied by the highest tax rate for individuals under
4.16section 290.06, subdivision 2c. When making this determination:
4.17 (1) nonbusiness deductions, standard deductions, or personal exemptions are not allowed;
4.18and
4.19 (2) a credit or deduction is allowed only to the extent allowed to the qualifying owner.
4.20 (e) The amount of each credit and deduction used to determine a qualifying owner's tax
4.21liability under paragraph (d) must also be used to determine that qualifying owner's income
4.22tax liability under chapter 290.
4.23 (f) This subdivision does not negate the requirement that a qualifying owner pay estimated
4.24tax if the qualifying owner's tax liability would exceed the requirements set forth in section
4.25289A.25. The qualifying owner's liability to pay estimated tax on the qualifying owner's
4.26tax liability as determined under paragraph (d) is, however, satisfied when the qualifying
4.27entity pays estimated tax in the manner prescribed in section 289A.25 for composite estimated
4.28tax.
4.29 (g) A qualifying owner's adjusted basis in the interest in the qualifying entity, and the
4.30treatment of distributions, is determined as if the election to pay the pass-through entity tax
4.31under paragraph (b) is not made.
4Sec. 3.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 5.1 (h) To the extent not inconsistent with this subdivision, for purposes of this chapter, a
5.2pass-through entity tax return must be treated as a composite return and a qualifying entity
5.3filing a pass-through entity tax return must be treated as a partnership filing a composite
5.4return.
5.5 (i) The provisions of subdivision 17 apply to the election to pay the pass-through entity
5.6tax under this subdivision.
5.7 (j) If a nonresident qualifying owner of a qualifying entity making the election to file
5.8and pay the tax under this subdivision has no other Minnesota source income, filing of the
5.9pass-through entity tax return is a return for purposes of subdivision 1, provided that the
5.10nonresident qualifying owner must not have any Minnesota source income other than the
5.11income from the qualifying entity, other electing qualifying entities, and other partnerships
5.12electing to file a composite return under subdivision 7. If it is determined that the nonresident
5.13qualifying owner has other Minnesota source income, the inclusion of the income and tax
5.14liability for that owner under this provision will not constitute a return to satisfy the
5.15requirements of subdivision 1. The tax paid for the qualifying owner as part of the
5.16pass-through entity tax return is allowed as a payment of the tax by the qualifying owner
5.17on the date on which the pass-through entity tax return payment was made.
5.18 (k) Once a credit is claimed by a qualifying owner under section 290.06, subdivision
5.1940, a qualifying entity cannot receive a refund for tax paid under this subdivision for any
5.20amounts claimed under that section by the qualifying owners. Once a credit is claimed under
5.21section 290.06, subdivision 40, any refund must be claimed in conjunction with a return
5.22filed by the qualifying owner.
5.23 EFFECTIVE DATE.This section is effective retroactively for taxable years beginning
5.24after December 31, 2020.
5.25 Sec. 4. Minnesota Statutes 2022, section 290.01, subdivision 19, is amended to read:
5.26 Subd. 19.Net income.(a) For a trust or estate taxable under section 290.03, and a
5.27corporation taxable under section 290.02, the term "net income" means the federal taxable
5.28income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through
5.29the date named in this subdivision, incorporating the federal effective dates of changes to
5.30the Internal Revenue Code and any elections made by the taxpayer in accordance with the
5.31Internal Revenue Code in determining federal taxable income for federal income tax
5.32purposes, and with the modifications provided in sections 290.0131 to 290.0136.
5Sec. 4.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 6.1 (b) For an individual, the term "net income" means federal adjusted gross income with
6.2the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.
6.3 (c) In the case of a regulated investment company or a fund thereof, as defined in section
6.4851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
6.5company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
6.6except that:
6.7 (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
6.8Revenue Code does not apply;
6.9 (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue
6.10Code must be applied by allowing a deduction for capital gain dividends and exempt-interest
6.11dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code;
6.12and
6.13 (3) the deduction for dividends paid must also be applied in the amount of any
6.14undistributed capital gains which the regulated investment company elects to have treated
6.15as provided in section 852(b)(3)(D) of the Internal Revenue Code.
6.16 (d) The net income of a real estate investment trust as defined and limited by section
6.17856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
6.18taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
6.19 (e) The net income of a designated settlement fund as defined in section 468B(d) of the
6.20Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal
6.21Revenue Code.
6.22 (f) The Internal Revenue Code of 1986, as amended through December 31, 2018
6.23December 15, 2022, applies for taxable years beginning after December 31, 1996, except
6.24the sections of federal law in section 290.0111 shall also apply.
6.25 (g) Except as otherwise provided, references to the Internal Revenue Code in this
6.26subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of
6.27determining net income for the applicable year.
6.28 EFFECTIVE DATE.This section is effective the day following final enactment, except
6.29the changes incorporated by federal changes are effective retroactively at the same time the
6.30changes were effective for federal purposes.
6Sec. 4.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 7.1 Sec. 5. Minnesota Statutes 2022, section 290.01, subdivision 31, is amended to read:
7.2 Subd. 31.Internal Revenue Code.Unless specifically defined otherwise, "Internal
7.3Revenue Code" means the Internal Revenue Code of 1986, as amended through December
7.431, 2018, except the sections of federal law in section 290.0111 shall also apply December
7.515, 2022. Internal Revenue Code also includes any uncodified provision in federal law that
7.6relates to provisions of the Internal Revenue Code that are incorporated into Minnesota law.
7.7 EFFECTIVE DATE.This section is effective the day following final enactment, except
7.8the changes incorporated by federal changes are effective retroactively at the same time the
7.9changes were effective for federal purposes.
7.10 Sec. 6. Minnesota Statutes 2022, section 290.01, is amended by adding a subdivision to
7.11read:
7.12 Subd. 33.Earned income."Earned income" has the meaning given in section 32(c) of
7.13the Internal Revenue Code, except a taxpayer must use earned income from the taxable year
7.14for which the taxpayer filed a return.
7.15 EFFECTIVE DATE.This section is effective the day following final enactment.
7.16 Sec. 7. Minnesota Statutes 2022, section 290.0123, subdivision 3, is amended to read:
7.17 Subd. 3.Amount for dependents.For an individual who is a dependent, as defined in
7.18sections 151 and 152 of the Internal Revenue Code, of another taxpayer for a taxable year
7.19beginning in the calendar year in which the individual's taxable year begins, the standard
7.20deduction for that individual is limited to the greater of:
7.21 (1) $1,100; or
7.22 (2) the lesser of: (i) the sum of $350 and that individual's earned income, as defined in
7.23section 32(c) of the Internal Revenue Code; or (ii) the standard deduction amount allowed
7.24under subdivision 1, clause (3).
7.25 EFFECTIVE DATE.This section is effective the day following final enactment.
7.26 Sec. 8. Minnesota Statutes 2022, section 290.0131, is amended by adding a subdivision
7.27to read:
7.28 Subd. 19.Disallowed business interest deduction.For any taxable year beginning after
7.29December 31, 2018, and before January 1, 2021, the amount of business interest deducted
7.30under the special rule in section 163(j)(10)(A) and (B) of the Internal Revenue Code of
7.311986, as amended through December 15, 2022, is an addition. Entities that are part of a
7Sec. 8.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 8.1combined reporting group under the unitary rules in section 290.17, subdivision 4, must
8.2compute deductions and additions as required under section 290.34, subdivision 5.
8.3 EFFECTIVE DATE.This section is effective the day following final enactment, except
8.4the changes incorporated by federal changes are effective retroactively at the same time the
8.5changes were effective for federal purposes.
8.6 Sec. 9. Minnesota Statutes 2022, section 290.0131, is amended by adding a subdivision
8.7to read:
8.8 Subd. 20.Disallowed net operating loss deduction.(a) The amount of a net operating
8.9loss arising in any taxable year beginning after December 31, 2017, and before January 1,
8.102021, and carried back under section 172(b)(1)(D) of the Internal Revenue Code is an
8.11addition in the taxable year the loss is carried. No addition is required for a net operating
8.12loss deduction that is a farming loss under section 172(b)(1)(B) of the Internal Revenue
8.13Code carried to the two years preceding the year the farming loss arose.
8.14 (b) The amount of a net operating loss deduction in any taxable year beginning after
8.15December 31, 2017, and before January 1, 2021, that exceeds the deduction allowed under
8.16section 172(a)(2) of the Internal Revenue Code is an addition. For purposes of this paragraph,
8.17the deduction allowed under section 172(a)(2) of the Internal Revenue Code is allowed in
8.18the case of a taxable year beginning after December 31, 2017.
8.19 (c) The amount of a Minnesota disallowed loss carryover is an addition. For purposes
8.20of this paragraph, "Minnesota disallowed loss carryover" means, for any taxable year
8.21beginning after December 31, 2017, and before January 1, 2021, a disallowed loss carryover
8.22as defined in section 461(l)(2) of the Internal Revenue Code, for a loss that is not allowed
8.23under section 461(l)(1)(B) of the Internal Revenue Code. For purposes of this paragraph,
8.24the limitation under section 461(l)(1)(B) of the Internal Revenue Code applies for any
8.25taxable year beginning after December 31, 2017.
8.26 (d) For purposes for this subdivision, "Internal Revenue Code" means the Internal
8.27Revenue Code of 1986, as amended through December 15, 2022.
8.28 EFFECTIVE DATE.This section is effective the day following final enactment, except
8.29the changes incorporated by federal changes are effective retroactively at the same time the
8.30changes were effective for federal purposes.
8Sec. 9.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 9.1 Sec. 10. Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
9.2to read:
9.3 Subd. 31.Delayed business interest.(a) For each taxable year an addition is required
9.4under section 290.0131, subdivision 19, the amount of the addition, less the sum of all
9.5amounts subtracted under this paragraph in all prior taxable years, that does not exceed the
9.6limitation on business interest in section 163(j) of the Internal Revenue Code of 1986, as
9.7amended through December 15, 2022, notwithstanding the special rule in section 163(j)(10)
9.8of the Internal Revenue Code, is a subtraction. Any excess is a delayed business interest
9.9carryforward, the entire amount of which must be carried to the earliest taxable year. No
9.10subtraction is allowed under this paragraph for taxable years beginning after December 31,
9.112022.
9.12 (b) For each of the five taxable years beginning after December 31, 2022, there is allowed
9.13a subtraction equal to one-fifth of the sum of all carryforward amounts that remain after the
9.14expiration of paragraph (a).
9.15 (c) Entities that are part of a combined reporting group under the unitary rules of section
9.16290.17, subdivision 4, must compute deductions and additions as required under section
9.17290.34, subdivision 5.
9.18 EFFECTIVE DATE.Paragraphs (a) and (c) are effective retroactively for taxable years
9.19beginning after December 31, 2019. Paragraph (b) is effective for taxable years beginning
9.20after December 31, 2022.
9.21 Sec. 11. Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
9.22to read:
9.23 Subd. 32.Delayed net operating loss deduction.The amount of the sum of each addition
9.24required in section 290.0131, subdivision 20, for each taxable year, except as otherwise
9.25provided, less the sum of all amounts subtracted under this subdivision in all prior taxable
9.26years, that does not exceed 80 percent of federal taxable income as defined in section 290.01,
9.27subdivision 19, determined without regard to this subdivision, is a subtraction. Any excess
9.28is a delayed net operating loss deduction carryforward, the entire amount of which must be
9.29carried to the earliest taxable year. No subtraction under this subdivision is allowed after
9.3020 taxable years from the taxable year in which an operating loss arises. The sum of the
9.31additions required under section 290.0131, subdivision 20, paragraph (a), are aggregated
9.32and assigned to the taxable year immediately succeeding the taxable year in which the
9.33operating loss arises, for purposes of determining the subtraction allowed under this
9.34subdivision in that succeeding taxable year and the amount carried forward.
9Sec. 11.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 10.1 EFFECTIVE DATE.This section is effective retroactively for taxable years beginning
10.2after December 31, 2018.
10.3 Sec. 12. Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
10.4to read:
10.5 Subd. 33.Excess business losses.The amount of a disallowed loss carryover under
10.6section 461(l)(1)(B) of the Internal Revenue Code is a subtraction.
10.7 EFFECTIVE DATE.This section is effective for taxable years beginning after December
10.831, 2025.
10.9 Sec. 13. Minnesota Statutes 2022, section 290.0133, is amended by adding a subdivision
10.10to read:
10.11 Subd. 15.Disallowed business interest deduction.For any taxable year beginning after
10.12December 31, 2018, and before January 1, 2021, the amount of business interest deducted
10.13under the special rule in section 163(j)(10)(A) and (B) of the Internal Revenue Code of
10.141986, as amended through December 15, 2022, is an addition. Entities that are part of a
10.15combined reporting group under the unitary rules in section 290.17, subdivision 4, must
10.16compute deductions and additions as required under section 290.34, subdivision 5.
10.17 EFFECTIVE DATE.This section is effective the day following final enactment, except
10.18the changes incorporated by federal changes are effective retroactively at the same time the
10.19changes were effective for federal purposes.
10.20Sec. 14. Minnesota Statutes 2022, section 290.0134, is amended by adding a subdivision
10.21to read:
10.22 Subd. 20.Delayed business interest.(a) For each taxable year an addition is required
10.23under section 290.0131, subdivision 19, the amount of the addition, less the sum of all
10.24amounts subtracted under this paragraph in all prior taxable years, that does not exceed the
10.25limitation on business interest in section 163(j) of the Internal Revenue Code of 1986, as
10.26amended through December 15, 2022, notwithstanding the special rule in section 163(j)(10)
10.27of the Internal Revenue Code, is a subtraction. Any excess is a delayed business interest
10.28carryforward, the entire amount of which must be carried to the earliest taxable year. No
10.29subtraction is allowed under this paragraph for taxable years beginning after December 31,
10.302022.
10Sec. 14.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 11.1 (b) For each of the five taxable years beginning after December 31, 2022, there is allowed
11.2a subtraction equal to one-fifth of the sum of all carryforward amounts that remain after the
11.3expiration of paragraph (a).
11.4 (c) Entities that are part of a combined reporting group under the unitary rules of section
11.5290.17, subdivision 4, must compute deductions and additions as required under section
11.6290.34, subdivision 5.
11.7 EFFECTIVE DATE.Paragraphs (a) and (c) are effective retroactively for taxable years
11.8beginning after December 31, 2019. Paragraph (b) is effective for taxable years beginning
11.9after December 31, 2022.
11.10Sec. 15. Minnesota Statutes 2022, section 290.06, subdivision 2c, is amended to read:
11.11 Subd. 2c.Schedules of rates for individuals, estates, and trusts.(a) The income taxes
11.12imposed by this chapter upon married individuals filing joint returns and surviving spouses
11.13as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
11.14their taxable net income the following schedule of rates:
11.15 (1) On the first $38,770, 5.35 percent;
11.16 (2) On all over $38,770, but not over $154,020, 6.8 percent;
11.17 (3) On all over $154,020, but not over $269,010, 7.85 percent;
11.18 (4) On all over $269,010, 9.85 percent.
11.19 Married individuals filing separate returns, estates, and trusts must compute their income
11.20tax by applying the above rates to their taxable income, except that the income brackets
11.21will be one-half of the above amounts after the adjustment required in subdivision 2d.
11.22 (b) The income taxes imposed by this chapter upon unmarried individuals must be
11.23computed by applying to taxable net income the following schedule of rates:
11.24 (1) On the first $26,520, 5.35 percent;
11.25 (2) On all over $26,520, but not over $87,110, 6.8 percent;
11.26 (3) On all over $87,110, but not over $161,720, 7.85 percent;
11.27 (4) On all over $161,720, 9.85 percent.
11.28 (c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
11.29a head of household as defined in section 2(b) of the Internal Revenue Code must be
11.30computed by applying to taxable net income the following schedule of rates:
11Sec. 15.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 12.1 (1) On the first $32,650, 5.35 percent;
12.2 (2) On all over $32,650, but not over $131,190, 6.8 percent;
12.3 (3) On all over $131,190, but not over $214,980, 7.85 percent;
12.4 (4) On all over $214,980, 9.85 percent.
12.5 (d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
12.6of any individual taxpayer whose taxable net income for the taxable year is less than an
12.7amount determined by the commissioner must be computed in accordance with tables
12.8prepared and issued by the commissioner of revenue based on income brackets of not more
12.9than $100. The amount of tax for each bracket shall be computed at the rates set forth in
12.10this subdivision, provided that the commissioner may disregard a fractional part of a dollar
12.11unless it amounts to 50 cents or more, in which case it may be increased to $1.
12.12 (e) An individual who is not a Minnesota resident for the entire year must compute the
12.13individual's Minnesota income tax as provided in this subdivision. After the application of
12.14the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
12.15by a fraction in which:
12.16 (1) the numerator is the individual's Minnesota source federal adjusted gross income as
12.17defined in section 62 of the Internal Revenue Code and increased by:
12.18 (i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
12.1917, and 290.0137, paragraph (a); and reduced by
12.20 (ii) the Minnesota assignable portion of the subtraction for United States government
12.21interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
12.22subdivisions 9, 10, 14, 15, 17, 18, and 27, and 31, and 290.0137, paragraph (c), after applying
12.23the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
12.24 (2) the denominator is the individual's federal adjusted gross income as defined in section
12.2562 of the Internal Revenue Code, increased by:
12.26 (i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
12.2717, and 290.0137, paragraph (a); and reduced by
12.28 (ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, and
12.2927, and 31, and 290.0137, paragraph (c).
12.30 (f) If an individual who is not a Minnesota resident for the entire year is a qualifying
12.31owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
12.327a, paragraph (b), the individual must compute the individual's Minnesota income tax as
12Sec. 15.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 13.1provided in paragraph (e), and also must include, to the extent attributed to the electing
13.2qualifying entity:
13.3 (1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
13.4addition under section 290.0131, subdivision 5; and
13.5 (2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
13.6subtraction under section 290.0132, subdivision 3.
13.7 EFFECTIVE DATE.This section is effective for taxable years beginning after December
13.831, 2022.
13.9 Sec. 16. Minnesota Statutes 2022, section 290.0671, subdivision 1a, is amended to read:
13.10 Subd. 1a.Definitions.For purposes of this section, the terms term "qualifying child,"
13.11and "earned income," have has the meanings meaning given in section 32(c) of the Internal
13.12Revenue Code, and the term "adjusted gross income" has the meaning given in section 62
13.13of the Internal Revenue Code.
13.14 "Earned income of the lesser-earning spouse" has the meaning given in section 290.0675,
13.15subdivision 1, paragraph (d).
13.16 EFFECTIVE DATE.This section is effective the day following final enactment.
13.17Sec. 17. Minnesota Statutes 2022, section 290.0675, subdivision 1, is amended to read:
13.18 Subdivision 1.Definitions.(a) For purposes of this section the following terms have
13.19the meanings given.
13.20 (b) "Earned income" means the sum of the following, to the extent included in Minnesota
13.21taxable income:
13.22 (1) earned income as defined in section 32(c)(2) of the Internal Revenue Code 290.01,
13.23subdivision 33;
13.24 (2) income received from a retirement pension, profit-sharing, stock bonus, or annuity
13.25plan; and
13.26 (3) Social Security benefits as defined in section 86(d)(1) of the Internal Revenue Code.
13.27 (c) "Taxable income" means net income as defined in section 290.01, subdivision 19.
13.28 (d) "Earned income of lesser-earning spouse" means the earned income of the spouse
13.29with the lesser amount of earned income as defined in paragraph (b) for the taxable year
13Sec. 17.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 14.1minus one-half the amount of the standard deduction under section 290.0123, subdivision
14.21, clause (1).
14.3 EFFECTIVE DATE.This section is effective the day following final enactment.
14.4 Sec. 18. Minnesota Statutes 2022, section 290.091, subdivision 2, is amended to read:
14.5 Subd. 2.Definitions.For purposes of the tax imposed by this section, the following
14.6terms have the meanings given.
14.7 (a) "Alternative minimum taxable income" means the sum of the following for the taxable
14.8year:
14.9 (1) the taxpayer's federal alternative minimum taxable income as defined in section
14.1055(b)(2) 55(b)(1)(D) of the Internal Revenue Code;
14.11 (2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
14.12taxable income, but excluding:
14.13 (i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
14.14 (ii) the medical expense deduction;
14.15 (iii) the casualty, theft, and disaster loss deduction; and
14.16 (iv) the impairment-related work expenses of a person with a disability;
14.17 (3) for depletion allowances computed under section 613A(c) of the Internal Revenue
14.18Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
14.19to the extent not included in federal alternative minimum taxable income, the excess of the
14.20deduction for depletion allowable under section 611 of the Internal Revenue Code for the
14.21taxable year over the adjusted basis of the property at the end of the taxable year (determined
14.22without regard to the depletion deduction for the taxable year);
14.23 (4) to the extent not included in federal alternative minimum taxable income, the amount
14.24of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
14.25Code determined without regard to subparagraph (E);
14.26 (5) to the extent not included in federal alternative minimum taxable income, the amount
14.27of interest income as provided by section 290.0131, subdivision 2;
14.28 (6) the amount of addition required by section 290.0131, subdivisions 9, 10, and 16;
14.29 (7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent
14.30not included in the addition required under clause (6); and
14Sec. 18.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 15.1 (8) to the extent not included in federal alternative minimum taxable income, the amount
15.2of foreign-derived intangible income deducted under section 250 of the Internal Revenue
15.3Code;
15.4 less the sum of the amounts determined under the following:
15.5 (i) interest income as defined in section 290.0132, subdivision 2;
15.6 (ii) an overpayment of state income tax as provided by section 290.0132, subdivision
15.73, to the extent included in federal alternative minimum taxable income;
15.8 (iii) the amount of investment interest paid or accrued within the taxable year on
15.9indebtedness to the extent that the amount does not exceed net investment income, as defined
15.10in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
15.11in computing federal adjusted gross income;
15.12 (iv) amounts subtracted from federal taxable or adjusted gross income as provided by
15.13section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, and 26 to 29, and 31;
15.14 (v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
15.15paragraph (c); and
15.16 (vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
15.17subdivision 7.
15.18 In the case of an estate or trust, alternative minimum taxable income must be computed
15.19as provided in section 59(c) of the Internal Revenue Code, except alternative minimum
15.20taxable income must be increased by the addition in section 290.0131, subdivision 16.
15.21 (b) "Investment interest" means investment interest as defined in section 163(d)(3) of
15.22the Internal Revenue Code.
15.23 (c) "Net minimum tax" means the minimum tax imposed by this section.
15.24 (d) "Regular tax" means the tax that would be imposed under this chapter (without regard
15.25to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
15.26under this chapter.
15.27 (e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
15.28after subtracting the exemption amount determined under subdivision 3.
15.29 EFFECTIVE DATE.(a) The changes in paragraph (a), clause (1), are effective at the
15.30same time the changes in section 10101(a)(4)(A) of Public Law 117-169 are effective for
15.31federal purposes.
15Sec. 18.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 16.1 (b) All other changes are effective for taxable years beginning after December 31, 2022.
16.2 Sec. 19. Minnesota Statutes 2022, section 290.095, subdivision 11, is amended to read:
16.3 Subd. 11.Carryback or carryover adjustments.(a) Except as provided in paragraph
16.4paragraphs (c) and (d), for individuals, estates, and trusts the amount of a net operating loss
16.5that may be carried back or carried over shall be the same dollar amount allowable in the
16.6determination of federal taxable income, provided that, notwithstanding any other provision,
16.7estates and trusts must apply the following adjustments to the amount of the net operating
16.8loss that may be carried back or carried over:
16.9 (1) Nonassignable income or losses as required by section 290.17.
16.10 (2) Deductions not allocable to Minnesota under section 290.17.
16.11 (b) The net operating loss carryback or carryover applied as a deduction in the taxable
16.12year to which the net operating loss is carried back or carried over shall be equal to the net
16.13operating loss carryback or carryover applied in the taxable year in arriving at federal taxable
16.14income provided that trusts and estates must apply the following modifications:
16.15 (1) Increase the amount of carryback or carryover applied in the taxable year by the
16.16amount of losses and interest, taxes and other expenses not assignable or allowable to
16.17Minnesota incurred in the taxable year.
16.18 (2) Decrease the amount of carryback or carryover applied in the taxable year by the
16.19amount of income not assignable to Minnesota earned in the taxable year. For estates and
16.20trusts, the net operating loss carryback or carryover to the next consecutive taxable year
16.21shall be the net operating loss carryback or carryover as calculated in clause (b) less the
16.22amount applied in the earlier taxable year(s). No additional net operating loss carryback or
16.23carryover shall be allowed to estates and trusts if the entire amount has been used to offset
16.24Minnesota income in a year earlier than was possible on the federal return. However, if a
16.25net operating loss carryback or carryover was allowed to offset federal income in a year
16.26earlier than was possible on the Minnesota return, an estate or trust shall still be allowed to
16.27offset Minnesota income but only if the loss was assignable to Minnesota in the year the
16.28loss occurred.
16.29 (c) This paragraph does not apply to eligible small businesses that make a valid election
16.30to carry back their losses for federal purposes under section 172(b)(1)(H) of the Internal
16.31Revenue Code as amended through March 31, 2009.
16.32 (1) A net operating loss of an individual, estate, or trust that is allowed under this
16.33subdivision and for which the taxpayer elects to carry back for more than two years under
16Sec. 19.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 17.1section 172(b)(1)(H) of the Internal Revenue Code is a net operating loss carryback to each
17.2of the two taxable years preceding the loss, and unused portions may be carried forward for
17.320 taxable years after the loss.
17.4 (2) The entire amount of the net operating loss for any taxable year must be carried to
17.5the earliest of the taxable years to which the loss may be carried. The portion of the loss
17.6which may be carried to each of the other taxable years is the excess, if any, of the amount
17.7of the loss over the greater of the taxable net income or alternative minimum taxable income
17.8for each of the taxable years to which the loss may be carried.
17.9 (d) The amount of a net operating loss carried forward must be reduced by any amounts
17.10used for the subtraction in section 290.0132, subdivision 33, in the next taxable year
17.11following the subtraction in which a net operating loss deduction is claimed.
17.12 EFFECTIVE DATE.This section is effective for taxable years beginning after December
17.1331, 2025.
17.14Sec. 20. Minnesota Statutes 2022, section 290A.03, subdivision 15, is amended to read:
17.15 Subd. 15.Internal Revenue Code."Internal Revenue Code" means the Internal Revenue
17.16Code of 1986, as amended through December 31, 2018 December 15, 2022.
17.17 EFFECTIVE DATE.This section is effective retroactively beginning with refunds
17.18based on rent paid in 2021 and property taxes payable in 2022.
17.19Sec. 21. Minnesota Statutes 2022, section 291.005, subdivision 1, is amended to read:
17.20 Subdivision 1.Scope.Unless the context otherwise clearly requires, the following terms
17.21used in this chapter shall have the following meanings:
17.22 (1) "Commissioner" means the commissioner of revenue or any person to whom the
17.23commissioner has delegated functions under this chapter.
17.24 (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
17.25and otherwise determined for federal estate tax purposes under the Internal Revenue Code,
17.26increased by the value of any property in which the decedent had a qualifying income interest
17.27for life and for which an election was made under section 291.03, subdivision 1d, for
17.28Minnesota estate tax purposes, but was not made for federal estate tax purposes.
17.29 (3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986,
17.30as amended through December 31, 2018 December 15, 2022.
17Sec. 21.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 18.1 (4) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
18.2excluding therefrom any property included in the estate which has its situs outside Minnesota,
18.3and (b) including any property omitted from the federal gross estate which is includable in
18.4the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.
18.5 (5) "Nonresident decedent" means an individual whose domicile at the time of death
18.6was not in Minnesota.
18.7 (6) "Personal representative" means the executor, administrator or other person appointed
18.8by the court to administer and dispose of the property of the decedent. If there is no executor,
18.9administrator or other person appointed, qualified, and acting within this state, then any
18.10person in actual or constructive possession of any property having a situs in this state which
18.11is included in the federal gross estate of the decedent shall be deemed to be a personal
18.12representative to the extent of the property and the Minnesota estate tax due with respect
18.13to the property.
18.14 (7) "Resident decedent" means an individual whose domicile at the time of death was
18.15in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply
18.16to determinations of domicile under this chapter.
18.17 (8) "Situs of property" means, with respect to:
18.18 (i) real property, the state or country in which it is located;
18.19 (ii) tangible personal property, the state or country in which it was normally kept or
18.20located at the time of the decedent's death or for a gift of tangible personal property within
18.21three years of death, the state or country in which it was normally kept or located when the
18.22gift was executed;
18.23 (iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue
18.24Code, owned by a nonresident decedent and that is normally kept or located in this state
18.25because it is on loan to an organization, qualifying as exempt from taxation under section
18.26501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is
18.27deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and
18.28 (iv) intangible personal property, the state or country in which the decedent was domiciled
18.29at death or for a gift of intangible personal property within three years of death, the state or
18.30country in which the decedent was domiciled when the gift was executed.
18.31 For a nonresident decedent with an ownership interest in a pass-through entity with
18.32assets that include real or tangible personal property, situs of the real or tangible personal
18.33property, including qualified works of art, is determined as if the pass-through entity does
18Sec. 21.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 19.1not exist and the real or tangible personal property is personally owned by the decedent. If
19.2the pass-through entity is owned by a person or persons in addition to the decedent, ownership
19.3of the property is attributed to the decedent in proportion to the decedent's capital ownership
19.4share of the pass-through entity.
19.5 (9) "Pass-through entity" includes the following:
19.6 (i) an entity electing S corporation status under section 1362 of the Internal Revenue
19.7Code;
19.8 (ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
19.9 (iii) a single-member limited liability company or similar entity, regardless of whether
19.10it is taxed as an association or is disregarded for federal income tax purposes under Code
19.11of Federal Regulations, title 26, section 301.7701-3; or
19.12 (iv) a trust to the extent the property is includable in the decedent's federal gross estate;
19.13but excludes
19.14 (v) an entity whose ownership interest securities are traded on an exchange regulated
19.15by the Securities and Exchange Commission as a national securities exchange under section
19.166 of the Securities Exchange Act, United States Code, title 15, section 78f.
19.17 EFFECTIVE DATE.This section is effective the day following final enactment, except
19.18the changes incorporated by federal changes are effective retroactively at the same time the
19.19changes were effective for federal purposes.
19.20Sec. 22. TEMPORARY ADDITIONS AND SUBTRACTIONS; INDIVIDUALS,
19.21ESTATES, AND TRUSTS.
19.22 (a) For the purposes of this section:
19.23 (1) "subtraction" has the meaning given in Minnesota Statutes, section 290.0132,
19.24subdivision 1, and the rules in that subdivision apply to this section;
19.25 (2) "addition" has the meaning given in Minnesota Statutes, section 290.0131, subdivision
19.261, and the rules in that subdivision apply to this section; and
19.27 (3) the definitions in Minnesota Statutes, section 290.01, apply to this section.
19.28 (b) The following amounts are subtractions:
19.29 (1) the amount of wages used for the calculation of the employee retention credit for
19.30employers affected by qualified disasters, to the extent not deducted from income, under
19Sec. 22.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 20.1Public Law 116-94, division Q, section 203, or Public Law 116-260, division EE, section
20.2303;
20.3 (2) the amount of wages used for the calculation of the payroll credit for required paid
20.4sick leave, to the extent not deducted from income, under Public Law 116-127, section
20.57001, as amended by section 9641 of Public Law 117-2;
20.6 (3) the amount of wages or expenses used for the calculation of the payroll credit for
20.7required paid family leave, to the extent not deducted from income, under Public Law
20.8116-127, section 7003, as amended by section 9641 of Public Law 117-2;
20.9 (4) the amount of wages used for the calculation of the employee retention credit for
20.10employers subject to closure due to COVID-19, to the extent not deducted from income,
20.11under Public Law 116-136, section 2301, as amended by Public Law 116-260, division EE,
20.12section 207, and Public Law 117-2, section 9651; and
20.13 (5) the amount required to be added to gross income to claim the credit in section 6432
20.14of the Internal Revenue Code.
20.15 (c) The following amounts are additions:
20.16 (1) the amount subtracted for qualified tuition expenses under section 222 of the Internal
20.17Revenue Code, as amended by Public Law 116-94, division Q, section 104;
20.18 (2) the amount of above the line charitable contributions deducted under section 2204
20.19of Public Law 116-136;
20.20 (3) the amount of meal expenses in excess of the 50 percent limitation under section
20.21274(n)(1) of the Internal Revenue Code allowed under subsection (n), paragraph (2),
20.22subparagraph (D), of that section; and
20.23 (4) the amount of charitable contributions deducted from federal taxable income by a
20.24trust for taxable year 2020 under Public Law 116-136, section 2205(a).
20.25 (d) The commissioner of revenue must apply the subtractions in paragraph (b) and the
20.26additions in paragraph (c), when calculating the following:
20.27 (1) the percentage under Minnesota Statutes, section 290.06, subdivision 2c, paragraph
20.28(e);
20.29 (2) a taxpayer's alternative minimum taxable income under Minnesota Statutes, section
20.30290.091; and
20Sec. 22.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 21.1 (3) "income" as defined in Minnesota Statutes, section 289A.08, subdivision 7, paragraph
21.2(j), for the purposes of determining the tax for composite filers and the pass-through entity
21.3tax.
21.4 (e) For the purpose of calculating property tax refunds under Minnesota Statutes, chapter
21.5290A, any amounts allowed as a subtraction in paragraph (b) are excluded from "income,"
21.6as defined in Minnesota Statutes, section 290A.03, subdivision 3.
21.7 EFFECTIVE DATE.(a) Paragraphs (a) to (d) are effective retroactively at the same
21.8time the changes were effective for federal purposes.
21.9 (b) Paragraph (e) is effective retroactively beginning with refunds based on rent paid in
21.102021 and property taxes payable in 2022.
21.11Sec. 23. TEMPORARY ADDITIONS AND SUBTRACTIONS; CORPORATIONS.
21.12 (a) For the purposes of this section:
21.13 (1) "subtraction" has the meaning given in Minnesota Statutes, section 290.0134,
21.14subdivision 1, and the rules in that subdivision apply to this section;
21.15 (2) "addition" has the meaning given in Minnesota Statutes, section 290.0133, subdivision
21.161, and the rules in that subdivision apply to this section; and
21.17 (3) the definitions in Minnesota Statutes, section 290.01, apply to this section.
21.18 (b) The following amounts are subtractions:
21.19 (1) the amount of wages used for the calculation of the employee retention credit for
21.20employers affected by qualified disasters, to the extent not deducted from income, under
21.21Public Law 116-94, division Q, section 203, or Public Law 116-260, division EE, section
21.22303;
21.23 (2) the amount of wages used for the calculation of the payroll credit for required paid
21.24sick leave, to the extent not deducted from income, under Public Law 116-127, section
21.257001, as amended by section 9641 of Public Law 117-2;
21.26 (3) the amount of wages or expenses used for the calculation of the payroll credit for
21.27required paid family leave, to the extent not deducted from income, under Public Law
21.28116-127, section 7003, as amended by section 9641 of Public Law 117-2;
21.29 (4) the amount of wages used for the calculation of the employee retention credit for
21.30employers subject to closure due to COVID-19, to the extent not deducted from income,
21Sec. 23.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 22.1under Public Law 116-136, section 2301, as amended by Public Law 116-260, division EE,
22.2section 207, and Public Law 117-2, section 9651; and
22.3 (5) the amount required to be added to gross income to claim the credit in section 6432
22.4of the Internal Revenue Code.
22.5 (c) The following amounts are additions:
22.6 (1) the amount of meal expenses in excess of the 50 percent limitation under section
22.7274(n)(1) of the Internal Revenue Code allowed under subsection (n), paragraph (2),
22.8subparagraph (D), of that section; and
22.9 (2) the amount of charitable contributions deducted for taxable year 2020 pursuant to
22.10the provisions of Public Law 116-136, section 2205(a).
22.11 EFFECTIVE DATE.This section is effective retroactively at the same time the changes
22.12were effective for federal purposes.
22.13Sec. 24. CHARITABLE CONTRIBUTION DEDUCTION; SPECIAL RULE FOR
22.142020.
22.15 For charitable contribution deductions under Minnesota Statutes, section 290.0122, for
22.16taxable year 2020, the provisions of Public Law 116-136, section 2205(a), do not apply.
22.17 EFFECTIVE DATE.This section is effective retroactively at the same time the changes
22.18were effective for federal purposes.
22.19Sec. 25. DEPENDENT CARE CREDIT; SPECIAL RULE FOR 2021.
22.20 For the purpose of calculating the dependent care credit under Minnesota Statutes, section
22.21290.067, for taxable year 2021, the provisions of Public Law 117-2, sections 9631 and 9632,
22.22do not apply.
22.23 EFFECTIVE DATE.This section is effective retroactively at the same time the changes
22.24were effective for federal purposes.
22.25Sec. 26. CASUALTY LOSS DEDUCTION; SPECIAL RULE FOR 2021.
22.26 For the purpose of calculating the standard deduction under Minnesota Statutes, section
22.27290.0123, and the casualty loss deduction under Minnesota Statutes, section 290.0122,
22.28subdivision 8, the following provisions do not apply:
22.29 (1) section 204(b) of the Taxpayer Certainty and Disaster Tax Relief Act of 2019, Public
22.30Law 116-94; and
22Sec. 26.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 23.1 (2) section 304(b) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, Public
23.2Law 116-260.
23.3 EFFECTIVE DATE.This section is effective retroactively at the same time the changes
23.4were effective for federal purposes.
23.5 Sec. 27. WORKING FAMILY CREDIT; SPECIAL RULE FOR TAX YEAR 2021.
23.6 For the purpose of calculating the working family credit under Minnesota Statutes,
23.7section 290.0671, for taxable year 2021, the provisions of section 32(n) of the Internal
23.8Revenue Code do not apply.
23.9 EFFECTIVE DATE.This section is effective retroactively at the same time the changes
23.10were effective for federal purposes.
23.11Sec. 28. EXTENSION OF STATUTE OF LIMITATIONS.
23.12 (a) Notwithstanding any law to the contrary, a taxpayer whose tax liability changes as
23.13a result of this act may file an amended return by December 31, 2023. The commissioner
23.14may review and assess the return of a taxpayer covered by this provision for the later of:
23.15 (1) the periods under Minnesota Statutes, sections 289A.38; 289.39, subdivision 3; and
23.16289A.40; or
23.17 (2) one year from the time the amended return is filed as a result of a change in tax
23.18liability under this section.
23.19 (b) Interest on any additional liabilities as a result of any provision in this act accrue
23.20beginning on January 1, 2024.
23.21 EFFECTIVE DATE.This section is effective retroactively at the same time the changes
23.22incorporated in this act were effective for federal purposes.
23.23Sec. 29. PROPERTY TAX REFUNDS; CORONAVIRUS-RELATED RETIREMENT
23.24DISTRIBUTIONS.
23.25 For the purpose of calculating property tax refunds under Minnesota Statutes, chapter
23.26290A, "income" does not include coronavirus-related distributions included in gross income
23.27under section 2202(a)(5) of Public Law 116-136.
23.28 EFFECTIVE DATE.This section is effective retroactively beginning with refunds
23.29based on rent paid in 2021 and property taxes payable in 2022.
23Sec. 29.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 24.1 Sec. 30. REPEALER.
24.2 Minnesota Statutes 2022, section 290.0111, is repealed.
24.3 EFFECTIVE DATE.This section is effective the day following final enactment.
24Sec. 30.
REVISOR EAP H0031-2HF31 SECOND ENGROSSMENT 290.0111 TEMPORARY CONFORMITY TO CERTAIN FEDERAL TAX CHANGES.
Subdivision 1.Adopting Internal Revenue Code changes.For the purposes of this chapter,
"Internal Revenue Code," as defined in section 290.01, subdivisions 19 and 31, includes the sections
of federal law specified in this section as enacted or amended through March 31, 2021.
Subd. 2.Further Consolidated Appropriations Act, 2020.(a) "Internal Revenue Code"
includes the following provisions of the Taxpayer Certainty and Disaster Tax Relief Act of 2019
in Public Law 116-94:
(1) section 101;
(2) section 116;
(3) section 117;
(4) section 130;
(5) section 131;
(6) section 132;
(7) section 144;
(8) section 201;
(9) section 202; and
(10) section 204.
(b) "Internal Revenue Code" includes section 301 of the Setting Every Community Up for
Retirement Enhancement Act of 2019 in Public Law 116-94.
Subd. 3.CARES Act."Internal Revenue Code" includes the following sections of Public Law
116-136:
(1) section 1106(i); and
(2) section 2202.
Subd. 4.Consolidated Appropriations Act, 2021.(a) "Internal Revenue Code" includes the
following provisions of the COVID-related Tax Relief Act of 2020 in Public Law 116-260:
(1) section 275;
(2) section 276; and
(3) section 277.
(b) For taxable years beginning after December 31, 2019, and before January 1, 2021, "Internal
Revenue Code" includes sections 278(b) and 278(c) of the COVID-related Tax Relief Act of 2020
in Public Law 116-260.
Subd. 5.American Rescue Plan Act."Internal Revenue Code" includes section 9042 of Public
Law 117-2.
1R
APPENDIX
Repealed Minnesota Statutes: H0031-2