Minnesota forgives 2020 unemployment benefits and PPP loans. So where is the money?



It will take weeks or months for Minnesota to recover taxes paid on unemployment benefits and business loans related to the COVID-19 pandemic.

About 500,000 Minnesotans are queuing up to get their tax credits back on the first $ 10,200 of 2020 unemployment benefits. More than 100,000 Minnesota businesses have received payroll protection loans and are now on the waiting list for reimbursement.

A month ago, Gov. Tim Waltz and leading lawmakers negotiated tax breaks. This deal in tax consolidated account during an extraordinary session, and lawmakers expect to take this measure by the end of June. But Minnesota IRS officials say they are waiting for the bill to become law before deciding whether they can automatically refund the money or demand corrected refunds.

The chairmen of the House and Senate tax committees said the agency needed to announce a decision as soon as possible.

“When will this decision be made? It should be passed soon, ”Senate Revenue Service Chair Carla Nelson of Rochester said in an interview. “There is nothing new here. The department has known what the law will be for a month already.

Minnesota is one of the few states that required people to pay income tax on unemployment benefits in 2020 and businesses to pay loans under the Payroll Protection Program. The federal government has long forgiven unemployment benefits and PPP loans from federal income taxes.

The deal, struck on the last day of the regular session, which turned out to be tax day, reassured individual filing parties and business owners that they would eventually get their money back. At the time, the only question was when.

A spokesperson for the Department of Revenue said the agency would wait until the law becomes law before updating and testing its systems to see if automatic refunds could occur.

“This system update and testing is a process that the department performs on an annual basis when changes to tax laws are made, and can take anywhere from a few weeks to several months depending on the complexity and resources required to make the change,” said Ryan Brown. press secretary of the agency. “Hundreds of thousands of Minnesota taxpayers received unemployment insurance or forgiven PPP loans in 2020, and it will take the department time to adjust affected returns as much as possible and process revised returns that taxpayers may need to file.”

Revenue Department launched subscription web page for email updates

House Taxes chairman Paul Marquart said he expects the agency to be able to automatically refund money to most tax filers, except in the most difficult cases.

“I can see where they need to wait to (find out) what the tax bill will be,” Marquart, DFL-Dilworth, said in an interview. “But I hope it will be sooner rather than later, and we will talk about it with the Commissioner.”

In addition to tax credits for PPP loans and unemployment benefits, Nelson and Marquart said the tax law also includes:

  • Minnesota-based film producers tax credit of $ 5 million per year for four years.
  • Eligibility for Tax Credit for Working Families in Minnesota will be expanded to those between the ages of 19 and 20 with or without dependents.
  • Annual Extension of Minnesota’s Historic Conservation Tax Credit
  • Extension of commercial industrial property exemptions to the first US $ 150,000.


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