Busy season 2018 is upon us and this season will bring lots of changes. A new federal tax bill has been passed for 2018. The State of Minnesota also passed the 2017 Minnesota Omnibus Tax Bill on May 30, 2017.
A few of the individual benefits of the Minnesota tax bill which are effective for 2017 are as follows:
- A new subtraction, up to $4,500 for married filing joint or $3,500 for single, may be used to offset social security and tier 1 railroad retirement income. The subtraction is subject to phase out limits.
- Contributions to a 529 collage savings plan may now qualify for either a subtraction or a credit, but not both.
- A subtraction, up to $3,000 for married filing joint or $1,500 for all others, may be used for 529 plan contributions.
- A tax credit may be claimed equal to the lesser of $500 or 50% of net contributions. The credit will be phased out with adjusted gross income in excess of $75,000.
- Minnesota residents may claim a nonrefundable credit up to $500 for student loan payments.
- Minnesota teachers obtaining a master’s degree may be eligible for a tax credit up to $2,500.
- A refundable credit may be claimed for taxes paid to Wisconsin.
- Minnesota nonresidents may need to accelerate installment sales for Minnesota assets or businesses if election is not made and future Minnesota returns are not filed.
- Minnesota estate exemption will increase $300,000 per year until reaching $3,000,000 in 2020.
- From 2018 thru 2023 taxpayers may be eligible for a credit for transactions with beginning farmers.
- Creation of first-time home buyer’s accounts and potential subtraction.
Partnership returns will follow the Federal due date of the 15th day of the third month after year end.