Status update on tax law changes implementation - August 30, 2021

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Minnesota Department of Revenue

Minnesota tax code changes were signed into law on July 1, 2021. The changes relate to unemployment compensation, Paycheck Protection Program (PPP) loan forgiveness, and other retroactive conformity provisions affecting tax years 2017 through 2020.  

Revenue is committed to providing updates on the progress being made on updating our forms, developing and testing our system, communicating to impacted taxpayers who need to amend their returns, and providing information on when refunds start going out to impacted taxpayers. 

Below is the status of progress as of August 30, 2021: 

  • Nearly 8,000 letters have been sent to individual taxpayers who will need to file an amended return to receive the UI and/or PPP loan forgiveness or take advantage of other provisions from the tax law change. Those receiving this letter should follow the instructions on the letter and file the amended return when they are ready.   
  • Over 2,000 returns impacted by PPP changes filed at the corporate entity level have started to receive refunds. These will continue to go out into September. These returns make up a small fraction of the total amount of impacted returns, do not require system development and testing, and are processed manually.
  • We completed the initial development phase of the system that will be needed to adjust over 540,000 tax returns and have moved on to the testing phase of this process. The uniqueness and timing of this type of system change makes it imperative that we get the development and testing parts of this process right so there aren’t mistakes that could result taxpayers missing out on the intended benefits or not getting the right refund amount. We will provide a timeframe for when these refunds will start going out once we’ve completed the testing process.  
  • In late July, we updated Minnesota tax forms for tax year 2020. If you have not yet filed a 2020 return, or filed for an extension, you may file using the updated forms to claim the recently passed unemployment and PPP loan forgiveness income exclusions and deductions, as well as other retroactive conformity provisions. 
  • We have posted near final 2021 Minnesota income and corporate tax forms on our website. Near final forms are drafts and should not be used to file returns. There may be additional changes to these forms, including sections that reference federal tax forms. These near final forms are for reference only.

We will continue to provide status updates as they are available.