Tax agency advises a pause for tax filers
Published 9:21 am Tuesday, March 25, 2014
ST. PAUL — For some Minnesota taxpayers, special attention from the tax man could be a good thing this year.
State Revenue Department officials advised taxpayers Monday on ways they can claim some of the last-minute breaks that lawmakers approved last week. They say one in 10 filers — or as many as 270,000 people — will get some measure of income-tax relief this year. That grows substantially next year when a larger Minnesota deduction becomes available to 650,000 married filers, with average savings of $115 per return.
Officials say people who may qualify for $49 million in new deductions and exemptions this year should wait until April 3 to file a return. Those who already did should wait to hear from the department about their next step. An additional refund may be automatic, but could take months to process. Some taxpayers will be told to supply more information or be instructed to file amended returns on paper forms.
While the tax filing itself deadline won’t change from its traditional April 15, amended returns are accepted well after.
Revenue Commissioner Myron Frans made light of the different role for his agency, which usually comes calling during audits.
“Most of the time people don’t want to hear from the Department of Revenue,” Frans said.
The breaks are suited to very specific populations and mirror expanded deductions that the federal government offers. Many of the breaks come with income caps, so those earning six-figure salaries probably won’t see any relief.
Families with incomes between $25,000 and $40,000 will see a larger “working family credit,” producing $334 in average savings. People with employer-provided assistance for tuition, adoptions or mass transit will be able to exclude more of the benefits from their income calculations. Recent college graduates can deduct more student loan income. People who endured a mortgage foreclosure or short sale in 2013 will see significant reductions in their tax burden because forgiven mortgage payments won’t count as income.
Assistant Commissioner Terri Steenblock said the agency is working with tax preparers and software vendors to get them to make adjustments on their end. If home software companies don’t update their systems by April 3, Steenblock said the department may reject returns prepared on the dated software. She urged taxpayers to pay attention to alerts on the department’s website for details on what software works.
The income tax breaks are part of a $443 million relief measure that passed last week.
More than half of the bill’s cost to state government results from erasing sales taxes on certain business transactions that were imposed last year.