Gov. Mark Dayton signed the tax relief bill that will provide hundreds of thousands of Minnesota taxpayers with extra deductions and exemptions they can claim on this year's taxes.
In a statement Dayton said, "These tax cuts will put more money in the pockets of Minnesota families and businesses, and in the spirit of the Unsession, make taxes simpler for Minnesotans."
And if you haven't field your taxes yet, don't do it this weekend – the Department of Revenue suggests waiting until next week to better take advantage of the new deductions and exemptions.
State Revenue Commissioner Myron Frans tells Forum News Service tax officials need a couple days to figure out exactly how these new changes affect taxpayers. About half of all Minnesota taxpayers have filed, he says. Some returns can be modified by the Department of Revenue without any additional work from the taxpayer – others will need to file an amended return to get the new breaks, and those people will be notified.
Frans tell the Pioneer Press the department will try to do everything it can to avoid having taxpayers file amended returns.
On 11 a.m. Monday, Frans will hold a taxpayer guidance press conference to offer guidance to those who have not filed. The department plans to stream it live online.
The deadline of April 15, Frans tells Forum News Service, will not change because of this delay.
Dayton, who had urged the sides to get a deal done by the end of this week so the cuts could be applied to this year's returns. thanked the legislative Democratic leaders who spearheaded the effort.
According to the governor's website, by conforming Minnesota's tax code to the federal governments the bill will simplify taxes and provide tax cuts to middle class Minnesotans.
- Tax Cuts for Married Couples. More than 650,000 married couples will save an average $115 per year through the elimination of the “marriage penalty.” This tax cut begins next year, for the 2014 income tax filing season.
- Tax Cuts for Working Families. Over 16,000 more middle class families will qualify for the Working Family Tax Credit, and everyone who qualifies for the credit will receive an increase.
- Tax Cuts for Parents. More than 25,000 families who qualify for child care tax credits will see an average increase in their tax credit of $74 per year.
- Tax Cuts for Students. More than 285,000 recent college graduates could save up to $190 per year by deducting their student loan interest. Another 40,000 current college students and parents will receive a tuition deduction of $140 per year, on average.
- Tax Cuts for Small Employers. Small businesses will be able to offer their employees tax-free tuition and adoption assistance. The tax bill signed by Governor Dayton today also simplifies small business taxes by eliminating requirements to maintain separate records for federal taxes.
- Additional Tax Cuts. These middle class tax cuts will also help seniors, teachers, and homeowners. More information about these tax cuts is available on the Governor’s website.
The bill passed with overwhelming support in both chambers of the legislature on Friday.
Earlier in the afternoon, the Senate also signed off on the measure, bringing the cuts one step closer to becoming a reality in time for tax filing season.
The Star Tribune says $57 million of the tax cuts are retroactive, meaning they can be applied to 2013 tax returns. The state's Department of Revenue has said it wants any changes in place by April 1, so the flood of late filers can take advantage before the April 15 deadline, the paper reports.
The bill will also make a $150 million contribution to the state's budget reserve.
In total the bill cuts taxes by $443 million in this budget cycle and $956 million in fiscal years 2016-2017. Lawmakers said Friday they expect to put a second tax bill in place before the session is over.