Purpose

• The bill requires the Minnesota Department of Revenue to create an electronic filing system that lets residents file their Minnesota individual income tax returns directly and for free. The system would be available on the Department of Revenue website.

Main Provisions

• Establish an electronic filing system for direct free filing of individual income tax returns.
• The commissioner may contract with a software vendor to develop the system, but the vendor must not offer paid tax preparation services for Minnesota individual income taxpayers for the years the system is active.
• The system should, to the extent feasible, coordinate with any federal direct filing systems so people can file in a consistent way.
• For taxable years beginning after December 31, 2025, the system must be capable of filing a sufficient number of tax forms so that the commissioner estimates at least 70 percent of resident individual income tax returns could be filed using the system.

Significance and Expected Changes

• Creates a new, free, government-run option for filing Minnesota income tax returns directly online.
• Potentially reduces reliance on paid tax preparation services for many residents during the years the system is active.
• Aligns Minnesota filing capabilities with federal direct filing efforts where feasible.
• Sets a measurable target (70% of resident returns) to be possible through the new system starting after 2025.

Scope and Implementation Notes

• The new system would be codified under Minnesota Statutes, specifically creating a new provision (Section 289A.081: Direct Free Filing of Individual Returns).
• The implementation includes collaboration with a software vendor under the conditions described and requires the system to be accessible via the Department of Revenue’s website.

Relevant changes to law - Establishes a formal mandate for direct free filing of Minnesota individual income tax returns. - Introduces a target capacity (70%) for the filing system by 2026 and beyond. - Adds coordination with federal direct filing systems to the extent feasible.

Relevant Terms - direct free filing - electronic filing system - Minnesota Department of Revenue - individual income tax return - resident - tax forms - tax year - paid tax preparation services - software vendor - federal direct file systems - 70 percent threshold - Minnesota Statutes chapter 289A - 289A.081 (Direct Free Filing of Individual Returns)