Recent Law Changes May Affect Individuals' 2007 Minnesota Taxes

Today the Minnesota Department of Revenue announced that the state of Minnesota has adopted most of the recent federal tax changes, as a result of legislation enacted on March 7, 2008.

SAINT PAUL, Minn., March 27 /PRNewswire-USNewswire/ -- Today the Minnesota Department of Revenue announced that the state of Minnesota has adopted most of the recent federal tax changes, as a result of legislation enacted on March 7, 2008.

However, two federal provisions that were not adopted will require individuals to add back the federal deductions for higher education tuition expenses and for educator expenses, beginning with tax year 2007.

Because the 2007 Minnesota forms and instructions were printed before the state adopted the federal changes, some taxpayers may be required to file amended individual income tax returns.

Taxpayers affected by the recent law changes include those who claimed the tuition and fees deduction or the educator expenses deduction on their federal return. It also includes taxpayers who included Schedule M1NC, Federal Adjustments, when they filed their 2007 Minnesota Form M1, Individual Income Tax Return.

Taxpayers who have not yet filed their 2007 Form M1:

Do not complete Schedule M1NC, since the schedule is now obsolete.

Taxpayers claiming the federal educator expenses and/or the college tuition and fees deduction on their federal returns must add back these deductions on line 9 of the revised Schedule M1M, Income Additions and Subtractions.

Nonresidents, part-year residents, and taxpayers claiming the child and dependent care credit and/or the K-12 education credit, must use the updated Schedules M1NR, M1CD, and M1ED, which were revised March 2008 and are now available on the department's website.

Taxpayers who have already filed their Minnesota return and included Schedule M1NC:

The department will review all returns that were filed with Schedule M1NC to determine if adjustments are required. In most cases, no adjustment will be required, and no further action is needed by the taxpayer. Notices will not be sent to taxpayers whose returns were not adjusted. If adjustments are needed, the department will notify taxpayers by June 1, 2008, of the changes made. If the department determines it cannot make the adjustments, notices will be sent by June 1 instructing taxpayers on what they need to do.

The department is notifying tax software companies and tax preparers about these changes.

For more information, including updated 2007 forms and instructions, go to the Department of Revenue's website: http://www.taxes.state.mn.us.