Some Minnesotans may be in line for another tax refund this year

Tuesday marked the last day to file or apply for an extension on state and federal income taxes. The date was three days later than the typical April 15 deadline due to Monday’s holiday in Washington, D.C.

Taxpayers are able to check on the status of their state income tax refund by contacting the Minnesota Department of Revenue at “Where’s My Refund?” or 1-800-657-3676. For those that were unable to pay all taxes owed by the April 18 deadline, the Department of Revenue may be able to work out a payment plan. Visit the website or call 1-800-657-3909 during business hours.

The timing of this year’s filing deadline comes just as the legislature prepares to negotiate a tax budget with Governor Dayton. The House Republican budget commits about $1.35 billion of the state’s $1.6 billion budget surplus to tax cuts. The Senate Republican budget commits about $900 million, while the Governor invests about $285 million in direct tax relief. A less obvious, but very important difference is that the Republican budgets spend significantly more in future years. For instance, the cost of an estate tax cut for about 1,000 heirs inheriting more than $2 million balloons to more than $116 million by 2020. Governor Dayton and DFL leaders prefer targeted tax relief that will not strangle the state’s budget in future years. Finding balance among the three proposals while saving enough to invest in education, health care, and other state obligations will be the key to ending session by the May 22 deadline.

If passed, this tax bill would be the second tax-relief package approved in 2017. The legislature worked quickly to approve a tax conformity bill in January that updated Minnesota’s tax code to federal changes adopted since Jan. 1, 2015. As a result, some taxpayers may have an additional state tax refund coming later this year. Once all 2016 taxes are processed, the Department of Revenue will begin revising 2015 tax documents and identifying any taxpayers that may be owed additional refunds based on these updates. No taxpayer will owe additional money, but some may see checks in the mail before the end of the year. Taxpayers should not file amended returns unless they are contacted by the Department; in most cases, taxpayers do not have to take any action and refunds will be automatically issued. Minnesotans most likely to be impacted by these changes include teachers with classroom expenses, those with higher education tuition payments, homeowners paying mortgage insurance or who experienced foreclosure or short-sale, and small business owners.