New Tax Bill Changes for Minnesota Taxpayers

Gov. Mark Dayton signed the recently passed tax bill into law on Friday, March 21. The new law includes several items that will provide tax relief along with some simplicity for Minnesota tax filers.

Some of the highlights in the legislation include the repeal of the following taxes:

• Gift tax (retroactive repeal)
• Warehousing tax that was set to begin April 1, 2014
• Equipment repair tax
• Telecommunications tax

Additional highlights include Minnesota conforming to the following federal provisions for 2013:

• For taxpayers age 70 1/2 or older, exclusion from gross income up to $100,000 of IRA distributions made directly to charitable organizations (the amount excluded is not allowed as a charitable deduction)
• Deduction in adjusted gross income of up to $250 for classroom expenses paid by a K-12 grade educator
• Exclusion for discharge indebtedness income on a principal residence
• Itemized deduction for mortgage insurance premiums on a principal residence
• Allowed depreciation of leasehold improvements and qualified restaurant property, including new restaurant property and improvements to retail property over 15 years (rather than 39 years) for property placed in service through 2013
• Special rule for charitable contributions of real property for conservation purposes for contributions made in tax years beginning in 2013
• Increased contribution limits from $500 to $2,000 per year and allowed use of education savings accounts for elementary and secondary school expenses
• Increased income limits and allowance of unlimited time period for the deduction of student loan interest
• Exclusion for employer-provided adoption assistance

The Minnesota Department of Revenue is expected to offer additional guidance on the tax law changes as soon as possible and will be holding a conference call on Wednesday, March 26, to provide more information. If you have already filed your 2013 return, the Department of Revenue will issue additional information on how they will handle these changes. In the past, the Department of Revenue has been able to calculate these types of changes without the need to file an amended return.

For a more extensive list of the changes being made, read our full article.

For more information on how these changes may impact your 2013 Minnesota state tax return or how these changes will impact future returns, please contact an Eide Bailly professional.