The Minnesota Department of Revenue started to adjust approximately 45,000 individual income tax returns in late April of 2022 due to changes to the standard deduction limitation calculation. In the original worksheet of the Minnesota Instruction Booklet for both the 2019 and 2020 tax years, the standard deduction limitation was reduced by 20% instead of 80%. The announcement of this error in September 2021 came too late for the tax software developers to update their forms prior to the extended 2020 individual income tax return deadline of October 15, 2021.
Taxpayers with federal adjusted gross income exceeding the following thresholds may be affected by a change in their Minnesota tax liability.
| Filing Status | Tax Year 2019 | Tax Year 2020 |
|---|---|---|
| Single | $276,000 | $280,534 |
| Married Filling Jointly | $357,334 |
$363,200 |
| Qualifying Widow(er) | ||
| Married Filing Separately | $178,675 | $181,609 |
| Head of Household | $317,000 | $322,200 |
Affected taxpayers will receive an adjustment letter from the MN Department of Revenue. The Department will not assess interest and penalties if the balance due is paid within 60 days of the date of the letter. Note this is only for Minnesota income tax purposes and does not impact the federal tax filing.
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This article is provided for general informational purposes only. It is not legal, accounting or other professional advice, as it does not address any individual facts, circumstances or concerns. Before making personal or business related decisions, please consult with appropriate legal, accounting or other qualified professionals.
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