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Filing Requirements (Income Tax)
Based on the taxpayer’s filing status, age, and gross income.
Filing Status
Age
Gross Income
Single
Under 65
65 or older
$10,350
$11,900
Married Filing Joint*
Under 65 (both spouses)
65 or older (one spouse)
65 or older (both spouses)
$20,700
$21,950
$23,200
Married Filing Separate
Any age
Head of Household
Under 65
65 or older
$13,350
$14,900
Qualifying Widow(er)
Under 65
65 or older
$16,650
$17,900
$4,050
* Married Filing Joint taxpayers not living with their spouse at the end of the tax year with a minimum of $4,050 of gross
income must file a return regardless of age.
Minnesota Residents: Must file a Minnesota return if they are required to file a federal return.
Part-year and Nonresidents: Must file a Minnesota return if their Minnesota-source income is $10,350 or more.
FILING/AGE REQUIREMENTS/
GROSS INCOME
IRS
MN
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Self-Employed
Self-employed taxpayers must file if they had net earnings of $400 or more.
 Carry on a trade or business as a sole proprietor
 An independent contractor
 Member of a partnership
 In business for themselves
Dependent (single and under 65)
A dependent must file a return if any of the following apply:
 Unearned income is over $1,050
 Earned income is over $6,300
 Gross income exceeds the larger of these amounts:
o $1,050
o Earned income (up to $6,300) plus $350
Dependent (65 or older, blind, or married)
See IRS Publication 17 or tax form instruction booklet.
Age Requirements
Age
70
1/2 .
What can be done
. . . . . . . . . . May be required to make IRA withdrawal (traditional)
65 . . . . . . . . . . . . . Cannot use 1040EZ
Can claim an additional standard deduction for 65 or older
Can claim Credit for Elderly (Schedule R and M1R)
Cannot receive Federal Earned Income Tax Credit without a qualifying child
> 59½ . . . . . . . . .
Can make IRA withdrawal without additional tax
>25 but < 65 . . . . Can claim Federal Earned Income Credit with no dependents
< 24 . . . . . . . . . . .
Qualifies as a dependent if a full-time student (part of at least five months)
> 19 . . . . . . . . . . .
Can be a child care provider for a relative if not a dependent
< 18 . . . . . . . . . . .
Can include child’s income on parent's return
< 17 . . . . . . . . . . .
Can be a qualifying child for Child Tax Credit
< 13 . . . . . . . . . . .
Can claim Child and Dependent Care Credit (both IRS and MN)
<6............
Can claim Child and Dependent Care Credit for own child if they are a provider (MN only)
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Gross Income
Use this list as a guide for determining the taxpayer’s filing requirement. Note: It is not a cumulative list.
Include in income:
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Alimony (recipient)
Annuities
Awards
Back pay
Bonuses
Breach of contract damages
Business income
Capital gain distributions
Commissions
Compensation for personal
services
Debts forgiven
Disability benefits (employer
funded)
Dividends
Employee Awards and bonuses
Estate and trust income
 Farm income
 Fees
 Gain from sale of
property/securities
 Gambling winnings
 Hobby income
 Interest
 IRA distributions (traditional)
 Jury duty fees
 Military pay and pension
 Notary fees
 Original issue discount
 Partnership income (taxpayer’s
share)
 Pensions
 Prizes
 Railroad retirement – Tier I and II
(equivalent to Social Security)
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Rents (gross rent)
Rewards
Royalties
Scholarships and Grants
(see Form 1040 instructions)
Severance pay
Social Security payment
(Form SSA-1099 – not SSI)
Profit from stock sale (Form
1099-B)
Supplemental unemployment
benefits
Tips and gratuities
Unemployment compensation
Wages and Salaries
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Exclude from income:
• Child support
• Death payments (see Form 1040 instructions)
• Dividends on life insurance
• Federal Employees’ Compensation Act payments
• Gifts, bequests, and inheritances (but not income from)
• Insurance proceeds (generally)
o Accident
o Casualty
o Health
o Life
• Interest on insurance dividends left with Veterans Administration
• Interest on tax-free securities
• Meals and lodging for the convenience of employer (see Form 1040 instructions)
• Public benefit payments (General Assistance, MFIP, and similar programs)
• Relocation payments
• Supplemental Security Income (SSI)
• Veterans benefits
• Workers’ compensation or payments in lieu of workers’ compensation
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Filing Status
Taxpayers must use the same filing status on their Minnesota return as they used on their federal return.
1. Single . . . . . . . . . . . . . . . . . .
Unmarried or legally separated as of December 31, 2016
2. Married Filing Joint . . . . . . .
Married as of December 31, 2016
• Include both incomes
• Both must sign return
• Both responsible for tax payment
3. Married Filing Separate . . .
Married as of December 31, 2016
• Report own income
• Provide name and SSN of spouse
• If one itemizes, both must itemize
4. Head of Household
The taxpayer must meet all of the following requirements to file head of household:
 Unmarried or “considered unmarried” on the last day of the tax year
 Paid more than half of the cost of keeping up a home for the year
 A qualifying person resided in taxpayer’s home for more than half of the year
o Exception: If the qualifying person is the taxpayer’s parent, they are not required to reside in the taxpayer’s home.
An individual is not the taxpayer’s qualifying person solely because:
 He or she lived with the taxpayer for the entire year, OR
 The taxpayer is entitled to claim the individual as a dependent under a multiple support agreement.
FILING STATUS/EXEMPTIONS
IRS
MN
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4. Head of Household (continued)
Married Child: If a qualifying person is married at the end of the year, both of the following must apply for the individual to
be the taxpayer’s qualifying person for head of household:
 The individual cannot file a joint return, unless the return is filed only as a claim for refund and no tax liability
would exist for either spouse if they had filed separate returns.
 The individual must be a U.S. citizen, U.S. national, or a resident of the United States, Canada, or Mexico. An
exception applies to certain adopted children.
5. Qualifying Widow(er) with Dependent Child
The taxpayer must meet all of the following requirements to file as a qualifying widow(er):
 Must have been entitled to file jointly in the year of the spouse’s death
 Has a qualifying child who lived in the home the entire tax year
 Has not remarried within two years of the spouse’s death
 Paid more than half of the cost of keeping up a home for the year
o May be eligible to use this status up to two years after the spouse’s death.
Exemptions
The exemption is $4,050 each for the taxpayer, spouse, and any eligible dependents. Exemption amounts phase out as AGI
exceeds applicable thresholds.
2 exemptions . . . . . . . .
3 exemptions . . . . . . . .
4 exemptions . . . . . . . .
5 exemptions . . . . . . . .
$ 8,100
$ 12,150
$ 16,200
$ 20,250
No additional personal exemption for age or blindness (For details, see the Additional Standard Deduction section).
No exemption for individuals who are, or could be, claimed as a dependent on someone else’s return.
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Dependents
A dependent is either a qualifying child or a qualifying relative.
Qualifying Child
In general, a qualifying child must meet all of the following conditions:
 The child must be the taxpayer's child (including an adopted child, stepchild, or eligible foster child), sibling, stepsibling,
or a descendant of any of them.
 The child must have lived with the taxpayer for more than half of 2016. An exception may apply for temporary
absences, children of divorced or separated parents, or children who were born or died in the tax year.
 At the end of 2016, the child must be under age 19, under age 24 if a full-time student, or permanently and totally
disabled (any age).
 The child must not have provided over half of his or her own support in 2016.
 The child is not filing a joint return (unless the return is only filed for a refund).
Qualifying Relative
In general, a qualifying relative must meet all of the following conditions:
 The person cannot be the qualifying child of another person in 2016.
 The person must be either a relative or any other person (where the relationship does not violate local law) who lived in
the home the entire year as a member of the household.
 The person must have gross income of less than $4,050. If the person is permanently and totally disabled, certain
income from a sheltered workshop may be excluded for this purpose.
 The taxpayer must have provided over half of the person’s support in 2016. Exceptions apply, in certain cases, for
children of divorced or separated parents and for a person supported by two or more taxpayers.
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Additional Rules for Dependents
1. Dependents of another person cannot claim any dependents on their own return.
2. Dependents who are married cannot file a joint return unless the return is filed only as a claim for refund and no tax
liability would exist for either spouse if they had filed separate returns.
3. Dependents generally must be a U.S. citizen, U.S. national, or a resident of the United States, Canada, or Mexico.
4. Tie-breaker rules, shown in the table below, apply if a child is a qualifying child for multiple people and more than one
claims the child as a dependent.
In this situation:
The child will be treated as the qualifying child of the:
One person is the child’s parent
Parent
Two people are the child’s parent
 Parent with whom the child lived for the longer period of time
 Parent with the highest AGI (if the child spent equal time with each)
None of the people are the child’s parent
Person who can claim the qualifying child of another taxpayer so long as
that person’s AGI is higher than the highest AGI of any parent of the
qualifying child
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Income and Adjustments
Types of income subject to tax:
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Wages, salaries, and tips
Interest (if over $1,500, attach a completed Schedule B)
o Bank accounts
o Credit union accounts, bonds (not Municipal)
o Loans and notes receivable
Dividends (if over $1,500, attach a completed Schedule B)
State tax refund, if the taxpayer itemized last year (see worksheet in Form 1040 instructions)
Alimony received
Business income or loss (attach a completed Schedule C or Schedule E)
Capital gain or loss (attach a completed Schedule D or Form 4797)
Pensions, annuities, IRAs, Tier II Railroad Retirement benefits
Rents, royalties, partnerships, etc.
Farm income or loss (attach a completed Schedule F)
Unemployment compensation
Social Security or equivalent Tier I Railroad Retirement benefits
Prizes, awards, gambling winnings, jury duty fees, and election board payments
Scholarships and fellowships (exclude payments for tuition, fees, books, and supplies)
INCOME/ADJUSTMENTS
IRS
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Adjustments to income:
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Certain expenses of military reservists (attach a completed Form 2106)
Health savings account deduction (attach a completed Form 8889)
Moving expenses (attach a completed Form 3903)
One-half of self-employment tax (attach a completed Schedule SE)
Self-employed SEP, SIMPLE, Keogh, and qualified plan contributions
Self-employed health insurance deduction
Penalty on early withdrawal of savings
Alimony paid (must list recipient’s Social Security number)
IRA contributions (maximum of $5,500 or, if age 50 or older, $6,500)
o Eligible to contribute only if less than 70½ years old
o Allowable deduction phases out, based on MAGI between the following levels:
 $61,000 - $71,000 if single
 $61,000 - $71,000 if head of household
 $98,000 - $118,000 if married filing joint (and both spouses are covered by a retirement plan)
 $98,000 - $118,000 if qualifying widow(er)
 $0 - $10,000 if married filing separate
 If the taxpayer did not live with their spouse at any time during the year, then the filing status
is considered to be single
Student loan interest (maximum of $2,500 for all except MFS and limited by MAGI)
At the time of publication, neither the tuition and fees deduction nor the above the line deduction for educator expenses apply
for tax year 2016. Congress may retroactively extend these adjustments to income for tax year 2016.
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Standard Deduction
Filing Status
Standard Deduction
Single . . . . . . . . . . . . . . . . . . . . . . . . . .
Married Filing Joint . . . . . . . . . . . . . . .
Qualifying Widow(er) . . . . . . . . . . . . . .
Married Filing Separate. . . . . . . . . . . .
Head of Household . . . . . . . . . . . . . . .
Filing Status
$ 6,300
$ 12,600
$ 12,600
$ 6,300
$ 9,300
Standard Deduction (65 or older or blind)
Single . . . . . . . . . . . . . . . . . .
65 or older or blind . . . . . . . . . . .
65 or older and blind. . . . . . . . . .
$ 7,850
$ 9,400
Married Filing Joint, or . . . .
Qualifying Widow(er)
One 65 or older or blind . . . . . . .
One 65 or older and blind. . . . . .
Both 65 or older or blind .. . . . . .
Both 65 or older and blind . . . . .
$13,850
$15,100
$15,100
$17,600
Head of Household . . . . . . .
65 or older or blind . . . . . . . . . . .
65 or older and blind. . . . . . . . . .
$10,850
$12,400
Married Filing Separate . . .
65 or older or blind . . . . . . . . . . .
65 or older and blind. . . . . . . . . .
$ 7,550
$8,800
Standard Deduction for Married Filing Separate: If one spouse itemizes, the other spouse must:
 File a return if their gross income is greater than $5
 Itemize their deductions. (The allowable standard deduction is $0.)
Standard Deduction for Dependents: The standard deduction of someone who is claimed as a dependent on someone else’s
return is limited to the greater of $1,050 or the dependent’s earned income (up to $6,300) plus $350.
STANDARD DEDUCTION
IRS
Itemized Deductions
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A. Medical and Dental - Allowable only to the extent they exceed 10% of AGI or 7.5% of AGI if taxpayer or spouse is 65 or older.
B. Taxes - State and local income tax (for example, withholding, estimated and regular state income taxes paid during the
calendar year), allowable amount from a car license (registration tax minus $35), and net real estate taxes (the amount paid
to a county minus the property tax refund received in the tax year).
C. Interest - There is no deduction for personal interest expenses (car loans, credit cards, etc.).
Mortgage Interest - The taxpayer may generally deduct all the interest on debt secured by their main or second home (not to
exceed the fair market value of residence) in any of the following situations:
 The debt, regardless of amount, was incurred on or before October 13, 1987, and was not refinanced after
 The debt is not more than $1,000,000 ($500,000 if married filing separate), provided they used the proceeds to buy,
build, or substantially improve the home
 The debt was not used for the purpose in (2), but it is $100,000 or less ($50,000 or less if married filing separate).
D. Contributions - Charitable contributions made to qualifying organizations by cash, check, or non-cash methods for which the
taxpayer has receipts. The contribution amount must be limited by any amount of benefit received and may be limited by the
taxpayer’s income.
E. Miscellaneous Deductions
Subject to 2% of AGI limitation:
 Unreimbursed employee expenses: job education expenses, job travel, professional/union dues, etc.
 Office-in-home expenses of employees
 Tax preparation fees
 Safe deposit box rental
Not subject to the 2% of AGI limitation:
 Gambling losses (to the extent of winnings)
 Work-related expenses for disabled individuals
Itemized deductions do phase out as income exceeds certain thresholds. Refer to IRS Publication 17 for more information
on allowable itemized deductions.
ITEMIZED DEDUCTIONS IRS
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Credits
Nonrefundable credits are only allowed up to the amount of total tax liability. Refundable credits are allowed in full and may
result in the taxpayer receiving a refund.
Nonrefundable Credits
Nonrefundable credits are applied in the order they are listed on federal Form 1040.
Child and Dependent Care Credit (attach a completed Form 2441)
Credit may be refundable on Form M1 (check instructions for Schedule M1CD).
To qualify, a taxpayer must:
1. Make payments for the care of a qualifying person (either of the following):
o A qualifying child under age 13 when the care was provided.
o A spouse or other person who was not physically or mentally able to care for themselves and lived with you
more than half the year.
2. Have earned income during the year (unless a full-time student or physically or mentally unable to care for
themselves).
3. Pay care expenses so the taxpayer (or spouse, if filing jointly) can work or look for work.
4. Make payments to an individual who cannot be claimed by the taxpayer as a dependent.
o For payments to the taxpayer’s child, the child must be 19 or older and not claimed as a dependent.
o Payments cannot be to the taxpayer’s spouse or the parent of the qualifying person.
5. NOT file married filing separate.
6. Identify the name, address, and taxpayer ID number of the child care provider.
Allowable amount of credit is calculated by:
1. Figuring the least of the taxpayer’s (or spouse’s):
 earned income
 actual expenses paid
 $3,000 (for one qualifying person) or $6,000 (for two or more qualifying persons) *
2. Limiting the result from step 1 by a percentage of AGI as calculated by the table included on Form 2441.
3. The total nonrefundable credit is the lesser of step 2 or the taxpayer’s overall tax liability.
* This amount must be reduced by any proceeds from an employer’s dependent care assistance program that are
excluded from income.
CREDITS
IRS
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Lifetime Learning Credit (attach a completed Form 8863)
Do not claim the credit for any student for whom you are also claiming the American Opportunity Credit.
To qualify, a taxpayer must:
1. Incur qualified expenses, including tuition and fees and course-related books, supplies, and equipment.
o Reduce the expense amount by any refunds or tax-free assistance received.
2. Be enrolled in any year of postsecondary education or courses to acquire or improve job skills
o Student does not need to be pursuing a degree.
o No limit to the number of years the credit can be claimed.
3. Be enrolled in at least one class.
4. Pay qualified expenses in 2016 for academic periods starting in 2016 or the first three months of 2017.
5. NOT file married filing separate, be a dependent, or be a nonresident alien.
Allowable amount of credit is calculated by:
1. Figuring 20% of the lesser of actual qualified expenses or $10,000.
2. Applying an income phase out of $131,000 for Married Filing Joint or $65,000 for all other filing statuses.
3. The total nonrefundable credit limited to $2,000 or taxpayer’s overall tax liability.
Child Tax Credit
Taxpayers with a limited Child Tax Credit should see if they also qualify for the refundable Additional Child Tax Credit (See page
19 for information about the Additional Child Tax Credit).
To qualify, a taxpayer must:
 Have at least one qualifying child who is:
o Claimed as a dependent (following all qualifying child rules) on the taxpayer’s return
o Under age 17 at the end of 2016
Allowable amount of credit is calculated by:
1. Applying an income phase-out based on the difference between MAGI and phase-out amounts based on filing
status ($110,000 Married Filing Joint, $55,000 Married Filing Separate, and $75,000 all others).
2. The total nonrefundable credit is limited to $1,000 (or limited amount from step 1) per qualifying child or
taxpayer’s overall tax liability.
Credit for the Elderly (attach a completed Schedule R)
To qualify, a taxpayer must:
1. Be 65 or older, or under 65 and meet all the following requirements:
o Retired on permanent and total disability
o Have not met mandatory retirement age
o Have received taxable disability benefits in 2016
2. Be a U.S. citizen or resident alien.
3. NOT file married filing separate, unless they lived apart from their spouse the entire tax year.
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Qualifying Income Limits
Even if the taxpayer qualifies based on the rules above, they do not qualify for the credit if their income is greater than the
amounts listed below:
Filing Status
AGI
OR
Total Nontaxable
Income*
Single, Head of Household . . . . . . . . . . . . . . . . . . . . . . .
Or Qualifying Widow(er)
$ 17,500 . . . . . . . . . . . . $ 5,000
Married Filing Joint
One qualifying spouse. . . . . . .
Two qualifying spouses. . . . . .
$ 20,000 . . . . . . . . . . . . $ 5,000
$ 25,000 . . . . . . . . . . . . $ 7,500
Married Filing Separate . . . . . . . . . . . . . . . . . . . . . . . . . .
(meets rule in step 4 above)
$ 12,500 . . . . . . . . . . . . $ 3,750
* Nontaxable Social Security and other nontaxable pensions, annuities, or disability income
Allowable amount of credit is calculated by:
 Determining the lesser of 15% of the credit calculated on Schedule R or the taxpayer’s overall tax liability.
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Refundable Credits
Earned Income Credit (attach a completed Schedule EIC)
Rules for all taxpayers:
1. Taxpayer (and spouse) and qualifying child must have valid Social Security numbers.
2. Taxpayer (and spouse) must be a U.S. citizen or resident alien for the entire year.
3. Filing status cannot be married filing separate.
4. Investment income must be less than $3,400.
5. Cannot file Form 2555 relating to foreign earned income.
6. Adjusted gross income must be less than:
o $14,880 ($20,430 if married filing jointly) if no qualifying child
o $39,296 ($44,846 if married filing jointly) if one qualifying child
o $44,648 ($50,198 if married filing jointly) if two qualifying children
o $47,955 ($53,505 if married filing jointly) if three or more qualifying children
Rules with a qualifying child:
1. Child must meet relationship, age, and residency tests (see below).
2. Qualifying child cannot be used by more than one person to claim the earned income credit.
3. Filer cannot be a qualifying child of someone else.
Rules with no qualifying child:
1. Must be at least 25 years old but under age 65 at the end of 2016.
2. Cannot be the qualifying child or dependent of another person.
3. Must live in the U.S. more than half the year.
Relationship, Age, and Residency Tests
1. Relationship: Must be a child, stepchild, foster child, sibling, stepsibling, half-sibling, or a descendant of any of
them.
 A married child must be claimed as a dependent to qualify.
2. Age: At the end of 2016, must be under age 19, be under age 24 and a full-time student, or be permanently and
totally disabled (any age).
3. Residency: Must have lived with the taxpayer in the main home, in the U.S., for more than half the year in 2016.
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Additional Child Tax Credit (attach a completed Form 8812)
 A refundable credit for individuals who get less than the full amount of the Child Tax Credit; based on the taxpayer’s
limited Child Tax Credit amount in excess of the allowed credit amount.
 Individuals who have three or more children follow a different calculation.
o See Form 8812 for a detailed description of the calculation.
American Opportunity Tax Credit (attach a completed Form 8863)
To qualify, a taxpayer must:
1. Incur qualified expenses, including tuition and fees and course-related books, supplies, and equipment.
o Reduce the expense amount by any refunds or tax-free assistance received.
2. Be in ONLY the first four years of post-secondary education (including time the Hope Credit was claimed):
o Student must be pursuing a degree or other education credential.
o Only available for four years per eligible student.
3. Be enrolled with at least half-time credits for at least one academic period during 2016.
4. Pay qualified expenses in 2016 for academic periods starting in 2016 or the first three months of 2017.
5. NOT file married filing separate or be a dependent or nonresident alien.
Allowable amount of credit is calculated by:
1. Allowing 100% of the first $2,000, and 25% of the next $2,000, of qualified expenses.
2. Applying an income phase-out of $180,000 for Married Filing Joint or $90,000 for all other qualifying statuses.
3. The total refundable credit limited to $2,500 per eligible student or taxpayer’s overall tax liability.
Adoption Credit
The taxpayer may qualify for a tax credit of up to $13,460, subject to income limitations, for qualified expenses paid to
adopt an eligible child. (Refer to IRS Publication 17 for details.)
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Minnesota Income Modifications
Minnesota Additions to Income
Line 2: State Income Tax or Sales Tax Addition
 If the taxpayer claimed an amount on Schedule A for state income or sales tax, it must be added back to income.
1. Total itemized deductions from Schedule A, Line 29 . . . . . . . . . . . . . . . . . .
______________

2. Enter amount from table on page 9 of M1 Instructions . . . . . . . . . . . . . . . .
______________
3. Subtract step 2 from step 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. State income or sales tax from Schedule A, Line 5 and any additional
state income tax (e.g. property taxes) included on Schedule A, Line 8 . . . .
______________
______________
5. Enter the lesser of step 3 or step 4 on Form M1, Line 2.
Taxpayers who did not itemize deductions should skip Line 2.
Line 3: Other Additions to Income (attach a completed Schedule M1M)
 Line 1: Excess itemized deductions
 Line 2: Phase out of personal exemption(s) for adjusted gross income that exceeds the applicable threshold
 Line 3: Interest from municipal bonds of another state or its governmental units
 Line 4: Federally tax-exempt dividends from mutual funds investing in bonds of another state
See the Schedule M1M Instructions for more details.
MINNESOTA MODIFICATIONS
MN
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Minnesota Subtractions from Income
Line 5: State tax refund
 Include in Minnesota taxable income the amount the taxpayer included on Form 1040, Line 10.
o If there is no amount on Line 10, leave it blank.
Line 6: Other Subtractions from Income (attach a completed Schedule M1M)
 Line 16: Net interest or mutual fund dividends from U.S. bonds
 Line 17: Education expenses paid for qualifying children in grades K-12 (see page 26 for more details)
 Line 18: Charitable contribution deduction for taxpayers who didn’t itemize and contributed more than $500
 Line 21: Subtraction for persons age 65 or over or permanently and totally disabled (see page 22 for more details)
 Line 22: Benefits from the Railroad Retirement Board included in federal taxable income
 Line 23: Residents of reciprocity states filing Form M1 only to receive a refund for all Minnesota tax withheld
 Line 24: Earned income of American Indians who worked and lived on a reservation
 Line 25: Federal active duty military pay received for services performed while a Minnesota resident
 Line 26: Income earned as a member of the Minnesota National Guard or Reserves
 Line 27: Active duty military pay while a resident of another state to the extent the income is federally taxed
 Line 28: Unreimbursed travel and lodging expenses and lost wages net of sick pay for an organ donor
 Line 30: New! Military pension or other retirement pay computed under Title 10
 Line 32: Post service education awards from AmeriCorps
 Line 36: Subtraction for excess itemized deduction limitation
See the Schedule M1M Instructions for more details.
Line 21, Schedule M1M: Age 65 or Older/Disabled Subtractions (attach a completed Schedule M1R)
Flipchart – 22
To qualify, a taxpayer (or spouse if filing joint) must be one of the following:
1. 65 years old by the end of 2016.
2. Permanently and totally disabled, and received federally taxable disability income in 2016.
Qualifying Income Limits
Even if the taxpayer qualifies based on the rules above, they do not qualify for the credit if their income is greater than the
amounts listed below:
Filing Status
Adjusted
Gross Income*
AND
RRB Benefits and
Nontaxable Soc. Sec.
Married Filing Joint
One spouse is 65+ or disabled . . . . . . . . . $ 38,500 . . . . . . . . . . . . . . . . .
Both spouses are 65+ or disabled . . . . . . $ 42,000 . . . . . . . . . . . . . . . . .
$ 12,000
$ 12,000
Married Filing Separate**
65+ or disabled . . . . . . . . . . . . . . . . . . . . .
$ 21,000 . . . . . . . . . . . . . . . . .
$ 6,000
Single, Head of Household
Or Qualifying Widow(er)
65+ or disabled . . . . . . . . . . . . . . . . . . . . .
$ 33,700 . . . . . . . . . . . . . . . . .
$ 9,600
*Adjusted gross income, plus any lump-sum distribution, less any taxable Railroad Retirement Board benefits.
**MFS status is allowable only if the taxpayer lived apart from his or her spouse for the entire year.
Flipchart – 23
Individual Nonrefundable Credits
Line 16: Marriage Credit (attach a completed Schedule M1MA)
To qualify, both taxpayers must:
1. File a joint return.
2. Have taxable earned income, taxable pensions, or taxable Social Security income.
o Earned income includes (but is not limited to): wages, salaries, tips, earnings from self-employment*, farm
income*, and some K-1 income*.
3. Have a minimum of $37,000 on Form M1, Line 8.
4. Verify the lesser-earning spouse’s income is at least $23,000.
*Reduce the amount of net income by the half of the Self-Employment Tax subtraction.
How to calculate the allowable amount of credit:
For couples where both spouses’ income is less than $101,000, use Schedule M1MA, Lines 6 and 7 to find the
allowable, nonrefundable credit in the table located in the Schedule M1MA instructions.
Line 17: Credit for Income Tax Paid to Another State (attach a completed Schedule M1CR)
To qualify, a taxpayer must:
1. Be a full-year or part-year domiciliary of Minnesota in 2016.
2. Pay 2016 state income tax on the same income in both Minnesota and another state.
o The taxpayer must file a separate M1CR for each state where the income was taxed twice.
3. Complete and file the return for the other state to determine that tax liability.
See Schedule M1CR instructions for more information regarding the calculation.
Line 18: Other Nonrefundable Credits (attach a completed Schedule M1C)
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Credit for long-term insurance premiums (attach a completed Schedule M1LTI)
Credit for past military service
Credit for increasing research activities (attach a completed Schedule KPI, KS, or KF)
Employer transit pass credit (attach a completed Schedule ETP)
Alternative minimum tax credit (attach a completed Schedule M1MTC)
SEED Capital Investment Credit
PAYMENTS AND CREDITS
MN
Flipchart – 24
Payments
Line 23: Minnesota Withholding (attach a completed Schedule M1W)

If the taxpayer received W-2, 1099, or W-2G forms or Schedules KPI, KS, or KF with Minnesota income tax
withheld, attach a completed Schedule M1W.
o Be sure to only include Minnesota withholding on Schedule M1W.
Line 24: Estimated Tax Payments
Only three types of payments are includable on Line 24:
 Total 2016 Minnesota estimated payments made in 2016 or 2017, either paid by check or electronically.
 The portion of the 2015 Form M1 refund designated to be applied to 2016 estimated tax.
 Extension payments made by the regular due date for a late-filed return, either by check or electronically.
Individual Refundable Credits
(Line 25: attach a completed Schedule M1REF)
Child and Dependent Care Credit (attach a completed Schedule M1CD)
To qualify, a taxpayer must:
1. Have household income* of $39,510 or less.
2. NOT file married filing separate.
3. Have had the qualifying person living with them for more than half of the year.
Day Care Providers can claim a child care credit if they care for their own child when the child has not reached age 6 by the
end of the tax year.
 If the child is 16 months or younger at the end of 2016, the credit is based on $3,000 of qualifying expenses**
($6,000 if there are two children under age 16 months).
 If the child is over 16 months of age but less than age 6 at the end of the year, the credit is based on the amount
the provider would charge to care for a child of the same age in their home.
A child born in 2016 may be a qualifying person for married filing joint taxpayers who birthed or adopted a child born in
2016, even if they paid no child care expenses.
 The credit for a child born in 2016 is based on the lesser of $3,000 of qualifying expenses** OR the taxpayers’
combined earned income.
 The taxpayers cannot participate in a pre-tax dependent care assistance program.
The allowable credit is refundable. A Form 2441 should be completed for calculation purposes, whether or not the credit
was filed federally, to qualify for the Minnesota Child and Dependent Care Credit.
*See page 28 for the definition of household income.
**Allowed even if actual dependent care expenses were not incurred or only one spouse had earned income.
Flipchart – 25
Working Family Credit (attach a completed Schedule M1WFC)
To qualify, a taxpayer must:
1. Be eligible for the federal Earned Income Credit. *
2. Be a Minnesota resident or have Minnesota-source income as a part-year resident.
o The credit for part-year residents is apportioned based on Minnesota source income.
o Nonresidents are not eligible for the credit.
* See page 18 for the qualifications for the federal Earned Income Credit.
K-12 Education Credit (attach a completed Schedule M1ED)
To qualify, a taxpayer must:
1. Have a qualifying child as defined by the Federal Earned Income Credit.
o See page 18 for a description of the relationship, age, and residency tests.
2. Have household income below certain limits based on the number of qualifying children in grades K-12.
Qualifying Children
Household Income
1 or 2
$ 37,500
3
$ 39,500
4
$ 41,500
5
$ 43,500
6+
$ 45,500 + $2,000 for
each child above 6
3. Have paid for education-related expenses for qualifying children in grades K-12.
o See page 26 for a list of qualifying expenses for the K-12 Education Credit and Subtraction.
4. NOT file married filing separate.
Allowable amount of credit is calculated by:
1. Limiting qualifying expenses to 75% of the total amount. The remaining 25% cannot be used for the subtraction.
2. The total refundable credit is the lesser of $1,000 per qualifying child or 75% of the qualifying expenses.
Flipchart – 26
Flipchart – 27
Credit for Parents of Stillborn Children (attach a completed Schedule M1PSC)
Parents who experience the stillbirth of a child in Minnesota may be eligible for a refundable credit of $2,000.
Taxpayers may qualify for this credit if:
1. They experienced the stillbirth of a child during the tax year after 20 weeks of gestation,
2. The Minnesota Department of Health issued a Certificate of Birth Resulting in Stillbirth for the child.
3. They would have been eligible to claim the child as a dependent.
Flipchart – 28
Line 12: Part-Year Residents and Nonresidents (attach a completed Schedule M1NR)
All part-year and nonresidents must use Schedule M1NR to determine the amount of total income and deductions allocable
to Minnesota in order to calculate their Minnesota tax liability.
 Form M1 must be completed through Line 11 to complete Schedule M1NR.
 A percentage of Minnesota source income to total income is applied to the calculated amount of tax from Form M1,
Line 11.
Filing and Payment Extensions
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
For most taxpayers, the due date for filing and payment for Form M1 is April 15, 2017; however, returns received on or
before April 17, 2017 will be considered timely.
If a Federal Form 4868 is filed with the IRS requesting a 6-month extension (until October 16) to file, then the
Minnesota filing deadline is also automatically extended with no late filing penalty.
o Any estimated Minnesota tax liability must be paid by April 18, 2017 to avoid a late payment penalty even if
the taxpayer has been granted an extension to file. There is no Minnesota extension to pay.
o Submit a payment voucher with a check or go to www.revenue.state.mn.us to pay electronically online.
NONRESIDENTS/DUE DATES
MN
Flipchart – 29
Household Income
Household income must be determined to calculate credits on Schedules M1ED, M1CD, and Form M1PR.
Household Income includes (but is not limited to):
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Federal Adjusted Gross Income (FAGI)
Nontaxable Social Security benefits (including amounts deducted for Medicare), Railroad Retirement Board benefits,
and Retirement Survivors Disability Insurance
o Do not include Social Security income for dependents
Deductions on Federal Form 1040 for payments to an IRA, Keogh, Simplified Employee Pension (SEP), or SIMPLE plans
Program payments received (Minnesota Family Investment Program (MFIP), Minnesota Supplemental Aid (MSA),
Supplemental Security Income (SSI), Group Residential Housing (GRA), and General Assistance (GA))
Refugee cash assistance and emergency assistance
Workers’ compensation benefits
Pre-tax contributions to an employee elective deferral plan such as a 401(k), 403(b), 457 deferred compensation or
SEP/SIMPLE plan (amount shown on Form W-2)
Contributions made to a dependent care and/or medical health expense account (amount shown on Form W-2)
Nontaxable employee transit and parking expenses or contributions to a section 125 cafeteria plan
Veterans’ benefits
Nontaxable scholarships, fellowships, grants for education, veterans’ education benefits, and qualifying tuition
reduction, including those from foreign sources
Federal subsidies paid to employers for providing prescription drug coverage for retired employees
Nontaxable pension and annuity payments, including lump-sum distributions and disability payments
o Do not include distributions received from any pension or annuity funded exclusively by the taxpayer AND for
which contributions could not be taken as a federal tax deduction
Income excluded by a tax treaty
Lump-sum distribution reported on Schedule M1LS, Line 1
Federally nontaxed interest and mutual fund dividends
Alimony or separate maintenance payments (but not child support payments)
Reduction in rent for caretaking responsibilities
o Difference between the actual rent and the amount the rent would have been if not the caretaker
Housing allowance for military or clergy
Nontaxable military earned income, such as combat pay
Strike benefits
Employer paid education or adoption expenses not included in FAGI
Gain from the sale of the primary residence excluded from income
To the extent they reduced FAGI—include the following losses and deductions:
o Capital loss carryforward
o Net operating loss carryforward/carryback
o Current year passive activity losses allowed under section 469
o Prior year passive activity loss carryforward claimed in 2016 for federal purposes
o Health Savings Account (HSA), educator expense, Archer MSA, and domestic production activities deductions
HOUSEHOLD INCOME
MN
Flipchart – 30
Household Income does NOT Include:
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Minnesota property tax refunds
Child support payments
Dependent’s income, including Social Security
State income tax refunds not included on Form M1, Line 1 (federal taxable income)
Dollar value of food, clothing, food stamps, and medical supplies received from government agencies
Payments from life insurance policies
Payments by someone else for the taxpayer’s care by a nurse, nursing home, or hospital
Fuel assistance payments
IRA rollovers
Gifts and inheritances
Nontaxable Holocaust settlement payments
Household Income for M1PR differs from the above in the following ways:
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Up to $5,500 ($11,000 for joint property tax return) of any combination of taxable or non-taxable retirement account
contributions can be subtracted.
All nontaxable distributions from a Roth IRA or other retirement account are added.
For homeowners only, the income of persons, other than a boarder, dependent, renter, parent or spouse’s parent for
the period of time they lived with the taxpayer during the year.
o Include a parent’s income if they lived in the home, are not the taxpayer’s dependent, and are co-owners.
Household Income for Married or Separated Taxpayers filing Form M1PR:
Renter
Include all income of both spouses for
the whole year; DO NOT include the
income of any other persons in the
household.
Homeowner
Include all income of both spouses for
the whole year; Include the income of
any other persons in the household,
except boarders, renters, dependents,
and parents (see pages 28 and 29).
Married During the Year . . . . . . . . .
(applying together)
Married During the Year . . . . . . . . .
(applying separately)
Same as “Married All Year”.
Same as “Married All Year”.
Include all of the taxpayer’s income for
the whole year PLUS the spouse’s
income for the time they were married;
DO NOT include the income of any
other persons in the household.
Include all of the taxpayer’s income for
the whole year PLUS the spouse’s
income for the time they were married;
Include the income of any other
persons in the household, except
boarders, renters, dependents, and
parents (see pages 28 and 29).
Divorced or Separated During . . . .
the Year
Include all of the taxpayer’s income for
the whole year PLUS the spouse’s
income for the time they were married;
Apply for separate refunds.
Include all of the taxpayer’s income for
the whole year PLUS the spouse’s
income for the time they were married;
Apply for separate refunds.
Married All Year . . . . . . . . . . . . . . . .
Flipchart – 31
Additional M1PR Information
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Renters: Total household income must be less than $58,880. The maximum refund is $2,060.
Homeowners: Total household income must be less than $108,660. The maximum refund is $2,660.
o Neither the property owner nor the relative occupant may claim a property tax or special refund for a property
with a Relative Homestead status.
Individuals that are eligible to be claimed as a dependent do not qualify for the property tax refund.
Schedule 1: Special Property Tax Refund
Complete Schedule 1 on Form M1PR to determine eligibility. There are no income limits on the special refund.
To qualify, the taxpayer must:
1. Have owned and lived in the home on both January 2, 2016 and January 2, 2017.
2. Have net property taxes on the homestead increase by at least 12% from 2016 to 2017.
3. Have the net property taxes increase by $100 or more.
Schedule 2: Subtractions from Household Income:
Complete Schedule 2 on Form M1PR to determine any applicable subtractions from household income.
Subtraction for those age 65 and older or disabled
If the taxpayer or their spouse is 65 as of December 31, 2016 or is disabled, enter $4,050 on Form M1PR, Line 31.
Dependent Subtraction
Number of
dependents*
Enter on Form
M1PR, Line 32
0..........
1..........
2..........
3..........
4..........
5 or more . . . . . . . .
$
0
$ 5,670
$10,935
$15,795
$20,250
$24,300
*If more than one person may claim the dependent, follow the federal tie-breaker rules (see table on page 10).
Retirement Account Subtraction
If the taxpayer or their spouse contributed to a 401(k), IRA, 457(b), or other qualified retirement plan, they can enter $5,500
($11,000 if filing joint) or their total contributions; whichever is less on Form M1PR, Line 33.
For more information about how to calculate the subtraction, see page 10 of the M1PR instruction booklet.
Property Tax Refund Filing Deadline
The 2016 Form M1PR filing due date is August 15, 2017. A refund will not be issued for returns received after August 15, 2018.
Refund checks expire two years after the original issue date.
M1PR
MN
Flipchart – 32
Other Information
Volunteer Resources
IRS
Minnesota
VITA Hotline . . . . . . . . . . . . . . . . . . . . . . . . . Mon-Fri: 9 am – 8 pm . . . . . . . . . Mon-Fri: 8 am – 4:30 pm
Sat: 11 am – 7 pm
Twin Cities Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 651-556-3050
Toll Free . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-800-829-8482 . . . . . . . . . . . . . 1-800-657-3829
E-mail Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [email protected]
Outreach & Education
Twin Cities Area . . . . . . . . . . . . . . . . . . . . . 651-726-1581 . . . . . . . . . . . . .
651-556-3052
Toll Free . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 1-800-818-6871
E-mail Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [email protected], and
[email protected]
Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.S. Bank Financial Center . . . . .
IRS Suite 705
1550 American Blvd. E.
Bloomington, MN 55425
Minnesota Revenue
Attn: Outreach & Education
Mail Station 5410
St. Paul, MN 55146-5410
Taxpayer Resources
Income Tax Information
Twin Cities Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 651-296-3781
Toll Free . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-800-829-1040 . . . . . . . . . . . . . 1-800-652-9094
E-mail Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [email protected]
Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 651-556-3003
1-800-657-3909
Sales Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 651-296-6181
1-800-657-3777
Taxpayer Rights Advocate Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 651- 556-6013
1-855-452-0767
Withholding Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 651-282-9999
1-800-657-3594
Order Forms . . . . . . . . . . . . . . . . . . . . . . . . . 1-800-829-3676 . . . . . . . . . . . . . 651-296-3781
Refund Status: Automated (24/7) . . . . . . . 1-800-829-4477 . . . . . . . . . . . . . 651-296-4444
1-800-657-3676
Websites . . . . . . . . . . . . . . . . . . . . . . . . . . . www.irs.gov . . . . . . . . . . . . . . . . . www.revenue.state.mn.us
Site Locations (by ZIP code) . . . . . . . . . . . . 1-888-227-7669 (TCE) . . . . . . . . 651-297-3724
1-800-906-9887 (VITA) . . . . . . . . 1-800-657-3989
OTHER INFORMATION
IRS
MN
Flipchart – 33
Standard Deduction, Filing Requirement, Mileage Rates, and Income Limits for Credits
2016
Single
Head of Household
Married Filing Joint/Qualified
Widow(er)
Married Filing Separate
Exemption
$6,300
$9,300
$12,600
Single
Head of Household
Married Filing Joint/Qualified
Widow(er)
Married Filing Separate
$1,550
$1,550
$1,250
$6,300
$4,050
$1,250
2015
2014
Standard Deduction
$6,300
$6,200
$9,250
$9,100
$12,600
$12,400
$6,300
$6,200
$4,000
$3,950
Additional Standard Deduction
$1,550
$1,550
$1,550
$1,550
$1,250
$1,200
2013
$6,100
$8,950
$12,200
$6,100
$3,900
$1,500
$1,500
$1,200
$1,250
$1,200
$1,200
Filing Requirements
Nonresident Filing Requirement
$10,350
$10,300
$10,150
$10,000
Standard Mileage Rates
Business (Jan 1- June 30)
$0.54
$0.575
$0.56
$0.565
Business (July 1- Dec 31)
$0.54
$0.575
$0.56
$0.565
Charitable
$0.14
$0.14
$0.14
$0.14
Medical & Moving (Jan 1-Jun 30)
$0.19
$0.23
$0.235
$0.24
Medical & Moving (July – Dec 31)
$0.19
$0.23
$0.235
$0.24
Income Limits
EIC: No children
$14,880
$14,820
$14,590
$14,340
EIC: No children, MFJ
$20,430
$20,330
$20,020
$19,680
EIC: 1 child
$39,296
$39,131
$38,511
$37,870
EIC: 1 child, MFJ
$44,846
$44,651
$43,941
$43,210
EIC: 2 children
$44,648
$44,454
$43,756
$43,038
EIC: 2 children, MFJ
$50,198
$49,974
$49,186
$48,378
EIC: 3 children
$47,955
$47,747
$46,997
$46,227
EIC: 3 children, MFJ
$53,505
$53,267
$52,427
$51,567
M1ED: K-12 Education Credit*
$37,500
$37,500
$37,500
$37,500
M1CD: Child and Dep Care Credit
$39,510
$39,400
$39,000
$38,570
*Maximum Household Income is $37,500 for 2 or fewer children. The limit increases by $2,000 for each
additional qualifying child.