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Minnesota DOR Provides Updates Following Major Tax Changes

Dated Aug. 17, 2021

SUMMARY BY TAX ANALYSTS

The Minnesota Department of Revenue announced the latest steps that it has taken in response to recently enacted legislation that updated multiple provisions of the state's tax code, including mailing letters to individual taxpayers who received unemployment compensation and/or Paycheck Protection Program loan forgiveness and will benefit from the changes; issuing refunds for taxpayers whose returns only required changes regarding PPP loan forgiveness; and continuing to update its system to reflect the changes, which will help process amended returns more swiftly.

The DOR previously announced its commitment to keeping taxpayers updated on necessary administrative changes and has already issued updated 2020 tax forms.

Status update on tax law changes implementation

08/13/2021

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 12, 2021:

  • 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.

  • Letters have started going out 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.

  • Refunds for returns with only PPP loan forgiveness changes have started going out to taxpayers. These returns make up a small fraction of the total amount of impacted returns, do not require system development and testing, and were processed manually.

  • We continue developing our system to automatically adjust impacted returns. Once this development is complete, we can start testing the system and processes to ensure accuracy. The volume of taxpayers impacted and 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. We will provide a timeframe for when these refunds will start going out once we've completed the testing process.

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

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