The state of Minnesota has clarified its filing requirements for the 2018 tax season. There was much uncertainty as to how the MN Department of Revenue would proceed since the state legislature did not pass a bill to conform to the changes made by the Federal government in December of 2017.
The new federal income tax changes were wide-ranging and represent the most dramatic changes to the code since perhaps 1986. (see my early post on these changes from Dec 2017).
The MN Department of Revenue has stated they will be adopting the Federal tax code as of Dec 2016 for 2018 tax preparation.
The bottom line is that taxpayers will need to do their taxes as two separate returns. This is because the most significant changes the federal government made was the expansion of the standard deduction and the elimination or reduction of certain itemized deductions. Therefore, if one has itemized in the past for the federal return, approach the 2018 preparation the same as you have before. It will be common for many taxpayers to use the standard deduction for the federal return and itemize on the state of MN return.
Since most taxpayers use software to file their taxes, either through professional preparers or software purchased directly, the process will not be too cumbersome. But one needs to be careful and added attention is to be given to the state return considering what non-conformity has done to the 2018 filing season.
LFC will be watching the 2019 legislative session on any developments toward conformity as the session moves along beginning in January.
If you have any questions regarding the 2018 filing season, please contact the LFC office.
