2017 Federal Nonconformity

The Disaster Tax Relief and Airport and Airway Extension Act of 2017 was enacted on September 29, 2017. This federal legislation may affect individuals filing their 2017 Minnesota income tax return.

What were the federal changes?

The federal changes include:

• An enhanced casualty loss deduction for casualties of personal property located in a hurricane zone at the time of the applicable hurricane
• Flexibility for distributions from certain retirement accounts for individuals whose primary residence was in a hurricane zone at the time of the applicable hurricane
• An enhanced charitable contribution deduction for certain contributions to organizations providing relief to those impacted by the hurricanes
• The option to use current or past year earned income for certain federal credits for those whose primary residence was in a hurricane zone at the time of the applicable hurricane

How do these impact 2017 Minnesota income tax returns?

We are developing a Schedule M1NC, Federal Adjustments, for tax year 2017. We will post a near final version of the schedule on December 1, and a final version on December 15.

We will also be changing Schedule M1M, Income Additions and Subtractions, lines 16 and 43. These lines currently read, “This line intentionally left blank.” These lines will be updated to allow an entry from Schedule M1NC.

Schema and Error Rejection Code (ERC) Changes

We will release an updated individual schema package on the State Exchange System by December 8. ERCs 0206 and 0209 will be inactivated.