MINNESOTA
separate property state

 

Military Income:  Fully taxable when stationed in Minnesota. Exempt when stationed outside Minnesota.   

Military Filing Requirement:  No, if no tax withheld a return does not have to be filed to maintain residency.

Military Spouse Residency Relief Act:  Service member in state in compliance with military orders. Service member was a resident in a state other than Minnesota.l Spouse in state solely to be with service member. Spouse must be a resident of same state as service member.

Forms Used:            

Filing Status:  Same as federal  If one of them is not a resident of Minnesota, they file a nonresident return.  Exempt from state tax when stationed outside Minnesota.  If taxes were withheld from military member's pay, file a resident return, subtract military pay on form M1M, for a full refund.

Attach Copy of Federal Return:  Yes

Other State Tax Credit:  Available if income was taxed by Minnesota and another state.  Must get a statement from the other state that says taxpayer is not eligible to claim this credit in the other state.  Attach Minnesota Schedule M-1CR and copy of other state return.   

Reciprocity States:  Michigan and North Dakota.

Where to Mail:
Minnesota Individual Income Tax
St. Paul, MN  55145-0010
 
Other Info: General Information:  (651) 296-3781
Minnesota Department of Revenue
Mail Station 5510
St. Paul, MN  55146-5510
Forms:  (651) 296-4444
Electronic Filing(651) 296-2153
Website:  www.taxes.state.mn.us  
E-filing Info:  Minnesota has no E-File signature form.  It is included with the federal.  ERO's must retain all supporting documents on file for one year.
Tax Form Instructions:
Resident Instructions Non-Resident Instructions

Military Specific Page

If an Active Duty Military resident of Minnesota served in a combat zone or qualified hazardous duty area a, they may be eligible for Credit for Military Service in a Combat Zone. (Download M-99 form here.) Taxpayer(s) must complete and mail in Form M99 to obtain the credit.

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer)
2.  Taxpayer and Spouse Different States of Residence
3.  Taxpayer and Spouse Non-Residents
4.  Taxpayer Non-Resident - Spouse Part-Year Resident
5.  Taxpayer Single - Resident but Income from Other State
6.  Amended Return

 

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer) - Taxpayer and spouse are both Minnesota residents, lived at their present location (outside of Minnesota) all year, and one or both had income.

Main Info Screen.  As Minnesota does not tax military income when stationed outside the state, the military members income is not taxable.  A resident return should be filed.

W-2 Form.  Minnesota does not tax military income when stationed outside the state.  To exclude the military income properly you must check the Military box on the bottom of the W-2 form for the military member's income.

Minnesota M1 Form.  A joint resident Minnesota income tax return is prepared.

 

Minnesota M1M Form Pg 2- Subtractions from income will be generated.  This form is used to subtract out the military out of state income.  If the military block on the bottom of the military W-2 is checked, the military income will be listed on line 25.

Complete all other fields and forms with red or required information.

2.  Taxpayer and Spouse - Different States of Residence - Taxpayer or spouse is a resident of Minnesota, while the other member is a resident of a different state.  A Minnesota income tax return must be prepared due to the taxpayer or spouse having Minnesota earned income.

Main Info Screen.  If the spouse is a domicile (resident) of another state, the parties should file as nonresidents.  For this example, the taxpayer is a resident of Minnesota while the spouse is a resident of North Dakota.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

 

Minnesota M1 Form.   A joint non-resident Minnesota income tax return should be prepared

Minnesota M1NR Form - Nonresident/Part-Year Residents form will be generated.  This form is used to subtract out the other-states (North Dakota) income.  The residency status should be reviewed on the top of the form and completed as in the example.

 

Minnesota M1M Form Pg 2- Subtractions from income will be generated.  This form is used to subtract out the military out of state income.  If not already listed, enter the military income on line 25.

Review the remainder of the Minnesota Form M1 and M1NR to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

3.  Taxpayer and Spouse Non-Residents - Taxpayer and spouse are residents of a different state.  The spouse and taxpayer must file a Minnesota tax return due to one or both having Minnesota earned income.

Main Info Screen.  If both members are residents of another state, the parties should file as nonresidents.  For this example, the taxpayer and spouse are both residents of Montana but must file a Minnesota income tax return because the spouse worked in Minnesota.

 

Resident/Nonresident Worksheet.  In order to comply with the Military Spouse Residency Relief Act, the nonresident military spouse's wages are set to zero as in the example. Link to a scratch pad from the indicated field.

 

Using the example, enter the nonresident spouse's wages on the scratch pad. Ensure the wages are entered as a negative number

 

Minnesota Form M1.   A joint non-resident Minnesota income tax return should be prepared. Check the box for a stateside military address, if applicable.

 

Minnesota M1M Form Pg 2- Subtractions from income is used to subtract out the nonresident military income. Enter the amount of nonresident military income on line 27.

Minnesota M1NR Form - Nonresident/Part-Year Residents form will be generated.   This form is used to subtract out the other-states (Wisconsin) income.  The residency status should be reviewed on the top of the form and completed as in the example.

Review the remainder of the Minnesota Form M1 and M1NR to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

4.  Taxpayer Non-Resident - Spouse Part-Year Resident - Taxpayer and spouse moved to or from Minnesota during the tax year.  The taxpayer is a resident of a different state.  The Spouse is a part-year resident of Minnesota.  The Spouse and taxpayer must file a Minnesota tax return due to one or both of them having Minnesota earned income and possibly income from another state.

Main Info Screen.  For this example, the taxpayer is in the military and a resident of Indiana.  The taxpayer and spouse moved from Minnesota to North Dakota during the year.  The spouse was a resident of Minnesota but now wishes to become a resident of North Dakota for tax purposes.  The spouse therefore was a part-year resident of both Minnesota and North Dakota and must file a Minnesota income tax return because the spouse worked in Minnesota.

 

Part Year Resident States Worksheet.  Review form to ensure income is split correctly for the appropriate states.

 

Minnesota Form M1.   A joint part-year resident Minnesota income tax return should be prepared.  This form will be generated for a Minnesota part- year resident who must report Minnesota earned income. Check the box for a stateside military address, if applicable.

 

M1NR Form - Nonresident/Part-Year Residents form will be generated.  This form is used to subtract out all the other-states (Indiana and North Dakota) income.  The residency status should be reviewed on the top of the form and completed as in the example. 

Minnesota M1M Form Pg 2- Subtractions from income is used to subtract out the nonresident military income. Enter the amount of nonresident military income on line 26.

Review the remainder of the Minnesota Form M1 and M1NR to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

5.  Single Military Resident of Minnesota with Income from Another State  - Taxpayer is single.  The taxpayer must file a Minnesota tax return due to him or her having Minnesota earned income.

Main Info Screen.  For this example the taxpayer is a military member stationed in North Dakota but a resident of Minnesota.  The taxpayer had a job in North Dakota therefore having North Dakota earned income.  Minnesota does not tax military income when stationed outside the state, the military members income is not taxable, prepare a resident tax return..

 

W-2 Form.  Minnesota does not tax military income when stationed outside the state.  To exclude the military income properly you must check the Military box on the bottom of the W-2 form for the military member's income.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.  

 

Minnesota M1 Form.  A resident Minnesota income tax return is prepared.  Minnesota taxes residents on income from all sources, even income earned while living in another state (North Dakota as in this example).  Check the box for a stateside military address, if applicable.

Minnesota M1M Form Pg 2- Subtractions from income will be generated.  This form is used to subtract out the military out of state income.  If the military block on the bottom of the military W-2 is checked, the military income will be listed on line 25

.

 

A Minnesota M1CR Form - Credit for Income Tax Paid to Another State is not required for the income earned in North Dakota because of the military tax free status the Taxpayer does not not have a tax liability.  Check each return to ensure a M1CR is not needed.

Complete all other fields and forms with red or required information.

6.  Amended Return  - An amended Minnesota return must be filed because the taxpayer received new tax information after their Minnesota return was filed.
Federal 1040X Form.  Before making any changes to the tax return add the US 1040X form to the tax return.  You must check the box under Income and Deductions to lock in the entries in Column A - Original amount or as previously adjusted.

Minnesota M1X - Amended Income Tax.  Add the Minnesota M1X Form to the return.  Choose the reason for the amended return.  You must check the box to lock in the entries in Column A - Original amount or as previously reported, before making any changes to the return.

Make whatever changes are required to the federal tax return.  For this example, a new W-2 was received.

Minnesota M1X -Amended Income Tax.  Return to the Minnesota M1X form, Page 2 to determine if the taxpayer is receiving an additional refund or owes money. Enter the current date in the Date field. Enter an explanation for why the Amended Return is being prepared. 

Amended returns can not be e-filed.  The taxpayer must mail the federal 1040X and any state amended returns if required to be filed.