Learn about a recently passed tax break for Minnesota educators

Minnesota lawmakers adopted a new law on Friday, January 13 that contains a tax break for educators. The law allows, for Minnesota tax purposes, the educator expense deduction of up to $250. This law applies for tax years 2015 and 2016.

 

2015

How do I know if I am eligible for this tax break?

Most educators are eligible for this tax break. You are eligible for a tax break if you entered an amount on line 14 of Minnesota Schedule M1M, Income Additions and Subtractions. 

 

What if I don’t have access to my 2015 Minnesota income tax return?

By the end of 2017, the Minnesota Department of Revenue will review your return and notify you if you are eligible.

 

What do I need to do?

Do not amend your return for this new Minnesota deduction unless the department sends you a letter. You or your tax preparer may decide to amend your return for other reasons.

 

If you qualify for the new deduction, one of three things will happen after the department’s review:

 

1. The department will make the necessary changes to your return, if possible. They will send you a letter explaining the changes and issue a refund.

 

2. The department will send you a letter requesting more information from you. They will use that information to make changes to your return, if possible. They will send you a letter explaining the changes and issue a refund. 

 

3. If the department cannot make changes to your return, they will notify you that you need to file an amended return to get the benefits of these tax law changes.

 

Could I owe more taxes because of these changes?

No. You will not owe additional tax as a result of these changes.

 

How much will my refund be from this tax break? 

We are unable to provide a refund amount until your return is adjusted. You can estimate the amount by multiplying the amount on line 14 of Schedule M1M by your Minnesota income tax bracket.

 

For most educators, this looks like:

 

$250 X 5.35% = $13	$250 X 7.08% = $18
$250 X 7.85% = $20	$250 X 9.85% = $25

 

2016

How do I know if I am eligible for this tax break?

Most educators are eligible for this tax break. If you purchased educational materials used in the classroom in 2016, you may be able to deduct up to $250 of those qualifying expenses on your federal return. This deduction is now allowed for Minnesota tax purposes.

 

What do I need to do?

Because this new law passed so close to the opening of the 2016 filing season, watch for updates to your out-of-the-box tax filing software. Install any software updates to ensure you have the updated versions when filing your 2016 taxes.

 

Use the forms and instructions posted on the department’s website to ensure you have the updated versions when filing your 2016 taxes.