HF3659

Purpose

• Modernize and expand Minnesota income tax filing requirements.
• Specifically adds a new requirement: individuals who earned Minnesota-source income while participating in immigration enforcement activities or providing material support to those activities must file a Minnesota income tax return.
• Keeps existing rules about who must file based on residency, income level, and connections to the Internal Revenue Code, but ties thresholds to annual determinations and applicable deductions.

Main provisions

• Amends Minnesota Statutes 2024 section 289A.08, subdivision 1, to outline who must file a Minnesota income tax return and when.
• Filing rules for nonresidents:
  • A nonresident must file if required by Internal Revenue Code rules, but not if their Minnesota-source gross income is below the threshold that would require a return for a full-year resident.
• Filing rules for residents:
  • A resident must file if their Minnesota-source gross income, minus certain deductions, meets the filing threshold for a single, full-year resident.
• Decedent returns:
  • The decedent’s final return and any prior-year returns with gross income above the filing threshold must be filed by the decedent’s personal representative; if there is no personal representative, the transferees who receive the decedent’s property must file.
• Definitions and references:
  • “Gross income” has the same meaning as in Minnesota statute 290.01, subdivision 20.
• Annual threshold determination:
  • The commissioner of revenue must annually determine the gross income levels that trigger a filing requirement, using the deduction amounts allowed under Minnesota law (section 290.0123).
• Child tax credit requirement:
  • Even if not otherwise required to file, a taxpayer who elected to receive advance payments of the child tax credit (CTC) must file a return.
• New requirement related to immigration enforcement:
  • In addition to other filing rules, a return must be filed if the taxpayer earned Minnesota-source income while participating in immigration enforcement activities or providing material support to those activities.

Significant changes to existing law

• Adds a new mandatory filing trigger for individuals who earn Minnesota-source income while participating in immigration enforcement activities or providing material support to those activities.
• Aligns annual filing threshold determinations with updated deduction allowances and ongoing administration by the Department of Revenue.
• Keeps existing residency-based filing thresholds but ties them to Minnesota-source income and deductions, as well as special cases like the child tax credit and decedent returns.

Implementation notes

• The Department of Revenue (the commissioner) will be responsible for:
  • annually setting the filing thresholds based on current deductions,
  • applying the new immigrant-enforcement-related filing trigger,
  • coordinating with requirements for decedents and personal representatives.

Key considerations for readers

• Individuals who work in Minnesota but are not residents could still be required to file if their Minnesota-source income crosses the threshold.
• People involved in immigration enforcement activities or providing material support to such activities may now have a direct filing obligation even if they wouldn’t have otherwise.
• If you elected to receive advance payments of the child tax credit, you must file a return regardless of other thresholds.

Relevant Terms - Minnesota-source income - immigration enforcement activities - material support to immigration enforcement activities - Minnesota income tax return - filing requirements - gross income - residency (Minnesota resident vs. nonresident) - decedent final income tax return - personal representative - transferee - Internal Revenue Code section 6012 - Minnesota Statutes 290.01 subdivision 20 (gross income definition) - 290.17 - 290.0123 (deductions) - 290.0132 (deductions) - 290.0661 (child tax credit) - advancement payments of the child tax credit - commissioner of revenue - annual determination of filing thresholds - Minnesota-source earnings triggering filing