Session F1. Understanding the Non-Resident Income

Transcription

SESSION F1
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Understanding the Non-Resident
Income Tax Filing Requirements
of North Dakota and Wisconsin
Brittany Dunn, CPA
Eide Bailly LLP
4310 17th Ave S
PO Box 2545
Fargo, ND 58108-2545
701-239-8500
[email protected]
Brittany Dunn, CPA, a tax manager at Eide Bailly LLP in Fargo, ND,
focuses her practice on multistate clients in the dealership and retail
industry. She also specializes in the areas of pass-through entities and
individual and corporate taxation.
Lauri A. Roberts, CPA
Wipfli LLP
7601 France Ave S Ste 400
Edina, MN 55435-5969
952-548-3400
[email protected]
Lauri A. Roberts, CPA, partner in the private client services group at
Wipfli LLP, has over 25 years of taxation and wealth management
experience. She specializes in providing tax preparation, tax and estate
planning, and family office services to executives, high net worth
individuals and wealthy families. In 2007, Roberts was recognized as
one of the "Women to Watch" by the Minneapolis/St. Paul Business
Journal and one of the "Top Women in Finance" by Finance &
Commerce.
This page is intentionally blank.
Understanding Non-Resident
Income Tax Filing Requirements:
North Dakota & Wisconsin
Brittany Dunn, CPA
[email protected]
Lauri Roberts, CPA
[email protected]
1
Learning Objectives
•
•
•
•
Learn about the Income Tax Reciprocity Agreements
Discuss Non-Resident Filing Requirements
Walk Through a Non-Resident Return and Common Issues
Provide Information on Income Tax Credits Available
2
1
ND/MN Reciprocity Agreement
• ND has a reciprocity agreement with MN
• Requirements
• Employee must return to MN home once per month
• Eligible Compensation
• Wages, Tips, & Commissions
• Ineligible Compensation
•
•
•
•
•
Rent & Royalty Income
Income from S Corporations (other than wages)
Gambling Income
Income from business that is derived from the sale of goods
Income from Sale of Property
3
Exemption from Withholding
• Form NDW-R
• Reciprocity Withholding Exemption Form
• Employees must renew form each year
• Prior to February 28
• No ND return required if exemption filed and zero ND tax
withheld
4
2
WI/MN Reciprocity Agreement
• WI does not have reciprocity with MN
• Reciprocity between WI and MN ended January 1, 2010.
• Therefore:
• For MN residents working in WI – all WI wages must be reported
to WI on Form 1NR and employers must withhold WI withholding
tax.
• For WI residents working in MN – all MN wages must be reported
to MN on form M- 1and Schedule M1NR and employers must
withhold MN withholding tax.
• Wages include all personal service income, such as salaries,
wages, commissions, and fees.
5
ND Withholding Refund
• If no NDW-R filed and ND withholding done
• Individual must file Non-Resident ND return to request a refund
• Form ND-1
•
•
•
•
•
•
Complete Top of Form Through Line C
Fill in Circle next to MN/MT Reciprocity
Line D and Lines 1 – 27 should be blank
ND income tax withheld: lines 28,30,31, and 34
Attach copy of federal return and W-2’s
Do NOT file Schedule ND-1NR
6
3
Gross Income from ND Sources
• Income from tangible property in ND
• Income from business carried on in ND
• Income from estate or trust
• Income from gambling activity in ND
• Interest, dividends, gains, or income from intangible property
• Wages and Commissions
7
Apportionment of Income
• ND Cent. Code §57-38.1-01
• Codified UDITPA requiring use of 3 Factor Apportionment
Formula
• Property
• Payroll
• Sales
8
4
Form ND-1
• ND Individual Income Tax Return Form
• Starting Point
• Federal Taxable Income
• Additions
• Contribution Planned Gift or Endowment Tax Credit based on
• Contribution Housing Incentive Fund Tax Credit based on
• No addition for bonus or Section 179 depreciation
9
Form ND-1
• Less: Subtractions
• Interest from U.S. Obligations
• Income from pass-through entity subject to ND’s financial
institution tax
• Net Long-Term Capital Gain
• Based on gains and losses reportable to North Dakota
• Active Duty Income in US Armed Forces
• Qualified Dividend Exclusion – 20% exclusion of dividend income
10
5
Form ND-1NR
• Tax Calculation for Nonresidents
• Column A – Total from Federal Return
• Column B – ND Portion
•
•
•
•
Line 1: Wages
Line 2: Interest & Dividend Income
Line 3: Business Income
Line 4: Ordinary and Capital Gains and Losses
• Also include ND source gains/losses from pass-through entities
11
Form ND-1NR
• Column B
• Line 5: IRAs, Pensions
• Line 6: Rental real estate, royalties, partnerships, S corporations,
and trusts
• Includes royalties interest in oil, coal, or other mineral property in ND
• Line 7: Farm Income or Loss
• Line 8: Other Income – Taxable refunds, Alimony, Unemployment,
Social Security
• Nonresidents should not include refunds, alimony or social security
12
6
Form ND-1NR
• Column B Deductions
• Line 10 – Student Loan Interest
• Line 11 – Moving Expenses
• Should be zero for nonresident
• Line 12 – Self Employment Deductions
• Line 13 – IRA Deduction
• Line 14 – Other Deductions
•
•
•
•
HSA Deduction
Alimony
Medical Savings Account
DPAD
13
Calculation of ND Tax
• Column B ÷ Column A = North Dakota Income Ratio
• North Dakota Income ÷ Federal Income = ND Income Ratio
• ND Income Ratio X Total ND Tax (resident)
• ND Tax (nonresident)
14
7
Calculation of ND Tax
• Farm Income Averaging
• Treat portion of current year income as if it had been taxed at the
marginal tax rates of prior three years
• ND-1FA Farm Income 3-Year Averaging Method
• If taxpayer income averaged on federal return, they may income
average on ND return
• Not required to income average in ND
• ND rates were reduced in 2011
• Income averaging in ND may not be advantageous
15
Gross Income from WI Sources
• Income from personal services (wages) – salaries, fees,
commissions, etc. earned while working in WI
• Income from tangible property in WI
• Rents, Royalties, and gain from sale of property
• Income from business carried on in WI
• Sole proprietorship, partnership, or S Corporation
• Only to extent the income is derived from tangible property or
business in WI
• Income from gambling activity in WI
• Interest, dividends, gains, or income from tangible property
• If derived from business carried on in WI
16
8
WI 1NPR
• If all you do is work in WI as a nonresident –
• All wages will be subject to WI withholding
• File form WI 1NPR and report wages as WI income and report all
WI withholding
• Calculate tax due or refund from WI
• Then file MN return (resident return) and claim a refund for tax
due on WI income
• If you used your MN withholding to cover tax due on other
sources of MN income, you may need to make MN quarterly
estimate payments now
• If you have other sources of WI income (from pass-through,
investments, etc.) report those on Form 1NPR as well and you
will again get credit on your MN return for tax owed to WI
17
WI 1NPR
• If you are a business owner (sole proprietor or pass-through)
that reports SE Health deduction on line 29 of your Federal
1040, you may get to take a partial deduction for this on the
WI 1NPR – line 23, column B.
• WI tax is calculated based on the ratio of your WI income to
your federal income.
18
9
WI 1NPR
• Common WI forms filed by MN residents:
• Form 1NPR – Nonresident and part-year resident Wisconsin
income tax return
• Schedule I – Adjustments to convert 2011 Federal adjusted gross
income and itemized deductions to the amounts allowable for
Wisconsin
19
Gross Income from MN Sources
• Income from personal services (wages) – salaries, fees,
commissions, etc. earned while working in MN
• Income from tangible property in MN
• Rents, Royalties, and gain from sale of property
• Income from business carried on in MN
• Sole proprietorship, partnership, or S Corporation
• Only to extent the income is derived from tangible property or
business in MN
• Income from gambling activity in MN
• Interest, dividends, gains, or income from tangible property
• If derived from business carried on in MN
20
10
MN M-1 and Schedule M1NR
• If all you do is work in MN and you are a WI resident –
• All wages will be subject to MN withholding
• File form MN M1 with Schedule M1NR and report wages as MN
income and report all MN withholding
• Calculate tax due or refund from MN
• Then file WI return (resident return) and claim a refund for tax
due on MN income
• If you used your WI withholding to cover tax due on other sources
of WI income, you may need to make WI quarterly estimate
payments now
• If you have other sources of MN income (from pass-through,
investments, etc.) report those on Form M1NR as well and you
will again get credit on your WI return for tax owed to MN
21
• If you are filing a non-resident MN return and you have federal
bonus depreciation or section 179, there are modifications to
income & deductions reported on MN Form M-1 and Schedule
M1NR. The calculations of these modifications are outside
the scope of this session.
22
11
• Common MN forms filed by WI residents:
•
•
•
•
MN M1 – Individual Income Tax Return
M1W – Minnesota Income Tax Withheld
Schedule M1NR – Nonresidents/part-year residents
Schedule M1M – Income additions and subtractions
23
ND Income Tax Credits
• Qualified Endowment Fund Credit
• 40% of contribution to qualified endowment fund
• Gift must be at least $5,000
• Maximum gift is $25,000 (single) & $50,000 (MFJ)
• Maximum credit of $10,000 (single) & $20,000 (MFJ)
• Credit may be carried forward 3 years
• Amount of contribution must be added back to ND taxable
income
24
12
• Housing Incentive Fund Credit
• Credit for 100% of contribution to housing incentive fund
• Valid for 2011 and 2012 tax years only
• Maximum total contribution is $15 Million ($9 Million currently
contributed)
• Can be carried forward for up to 10 years
• Contribution must be added back to ND taxable income
25
WI Income Tax Credits
• See http://www.dor.state.wi.us/businesses/incentives.html for
a listing of various tax credits that can flow through to
individuals from pass-through entities. Some examples are:
•
•
•
•
•
•
Enterprise zone jobs credit
Development zone credit
Technology zone credit
Various dairy and livestock related credits
Jobs tax credit
Manufacturing investment credit
26
13
North Dakota Supplemental Handout
Understanding Non-Resident Income Tax Filing Requirements: ND
Reciprocity
 ND has a reciprocity agreement with the state of MN, which provides that residents of
MN do not have to pay ND income tax on compensation received for work performed in
ND as long as the conditions in the agreements are met.
o Employee must return to his or her home in MN at least once every month to
qualify for the exemption
 Qualifying Income
o Eligible Compensation
 Wages, salaries, tips and commissions that an employee receives from an
employer
o Ineligible Income
 Income from tangible property, such as rents, royalties and gains from
sales or exchange
 Income from gambling activity
 Income from Subchapter S Corporation, other than wages
 Income from a business that is derived from the sale of goods
 Income from a business that provides personal or professional services
where the sale of goods or services of employees is more than incidental
to the production of income
 Form NDW-R Reciprocity Exemption From Withholding for qualifying MN residents
working in ND
o Must renew exemption form at the beginning of each year by completing and
submitting new Form NDW-R to their employer on or before 2/28
o Employer is responsible for making Form NDW-R available to employees
o Employer must submit completed form to ND Office of State Tax Commissioner
by March 31
o For employees who change their address or are new, Exemption Form must be
completed within 30 days after beginning work and employer must submit to
Office of State Tax Commissioner within 30 days of receipt
o No need to file ND return if exemption is filed and no ND tax is withheld
 Failure to file NDW-R resulting in ND Withholding
o File Non-Resident ND return (Form ND-1)
 Complete Top of Form Through Line C
 Fill in the circle next to “MN/MT Reciprocity”
 Leave line D and lines 1 through 27 blank
 Fill in amount of ND income tax withheld on lines 28,30,31, and 34
 File Form ND-1 with a copy of your federal return and Form W-2s
showing ND income tax withholding
 Do not file Schedule ND-1NR
Page 1
ND Non-Resident Filing Requirement
 Gross Income from ND Sources
o Income from tangible property in ND
• Rents, royalties, and gain from sale of property
• Income from business carried on in ND
• Sole proprietorship, partnership, or S corporation
• Only to extent the income is derived from tangible property or business in
ND
• Income from gambling activity in ND
• Interest, dividends, gains, or income from intangible property
• If derived from business carried on in ND
• Wages and Commissions
• Most likely exempt under reciprocity agreement for MN residents

ND Apportionment of Income - ND Cent. Code §57-38.1-01
o If a nonresident individual carries on a business activity partly within and partly
without the state and derives income from a sole proprietorship, or through a
partnership, S corporation, or other pass-through entity, the individual must assign
income to ND, in accordance with the allocation provision of the Uniform
Division of Income for Tax Purposes Act (UDITPA)
o Business income apportioned using equally weighted 3 factor apportionment
formula
 Property
 Payroll
 Sales
ND Non-Resident – Form ND-1
 Complete through line 19
 Additions
o Line 2 Lump-sum distribution from a qualified retirement plan
 Do not complete if you received the distribution while a nonresident of
ND
o Line 3- Loss from financial institution
 Loss reported to you by pass-through entity that is subject to ND’s
financial institution tax
o Line 4 Contribution Adjustment
 Contribution amount which you received a Planned Gift Credit,
Endowment Fund Credit, or Housing Incentive Fund Credit
o No addition for bonus depreciation or Section 179 depreciation
Page 2

Subtractions
o Line 7 - US Obligation Interest
o Line 8 -Net Long-Term Capital Gain Exclusion (30%)
 Non-resident exclusion is limited to a net long-term capital gain based on
capital gains and losses reportable to ND
o Line 10 – US Railroad Retirement Board benefits
o Line 11 – Income from financial institution
 Income from pass-through entity subject to ND’s financial institution tax
o Line 12 – ND National Guard Active Duty Income
o Line 13 – Non Resident – Income from active duty in US Armed Forces or for
active duty in the commissioned corps of the Public Health Service or National
Oceanic and Atmospheric Administration
o Line 14 – College SAVE Contribution Deduction
 Contribution made to ND College SAVE account administered by the
Bank of North Dakota, up to $10,000 (MFJ)
o Line 15 – Qualified Dividend Exclusion
 You may exclude 20% of dividend income on qualified dividends
reportable to ND
o Line 16 – Other Subtractions
 Renaissance Zone Income Exemption
 New or Expanding Business Income Exemption
 Employee Workforce Recruitment Exclusion
Schedule ND-1NR
o Column A – Total from Federal Return
o Column B
 Line 1 – Wages
 Do not include:
o Wages that are exempt under reciprocity agreement
o Compensation for Active Duty of US Armed Forces while
Nonresident
o Compensation received for work performed in ND while a
nonresident if you are a civilian spouse of a nonresident US
armed forces member stationed in ND and you are in ND
only to live with the service member
 Line 2 – Interest and Dividend Income
 ND source interest and dividends received from a pass-through
entity
 Line 3 – Income or loss attributable to the portion of a sole proprietorship
operated in ND while a nonresident
 Do not include income or loss from a personal or professional
service business operated in ND while a MN resident if the income
is eligible for exemption under reciprocity – Not exempt if sale of
goods is more than incidental to production of income
Page 3










Line 4 – Include net gains and losses from tangible property in ND
received while a nonresident
 Include your share of ND-source net gains and losses received
from a pass-through entity while a nonresident
Line 5 – Should be zero if a non-resident
Line 6 – Net income and losses from the rental of tangible property in ND
 Include royalties and other income from interest in oil, coal, or
other mineral property in ND
o Taxed at ordinary income rates
o Federal treatment of royalty and other mineral income is
adopted
 Include your share of ND ordinary income or loss, net rental
income, and other income not reported on other lines received
from a pass-through entity while a nonresident
 Include your share of ND-source income and losses from an estate
or trust received while a nonresident
o Do not include interest, dividends, pensions, or annuities
Line 7 – Include net income or loss attributable to the portion of a farm
operated in ND while a nonresident
Line 8 – Do not include state and local income tax refunds, alimony, and
social security benefits if you are a nonresident
Line 10 – Student Loan Interest
 Multiply amount in Column A by a ratio equal to ND income
divided by total income
Line 11 – Moving expenses attributable to a move to ND
 Should be zero if a non-resident
Line 12 – Self-Employment Deductions
 Multiply amount in Column A by a ratio equal to ND selfemployment income divided by total self-employment income
Line 13 – IRA deduction
 Multiply amount in Column A by a ratio equal to ND earned
income divided by total earned income
Line 14 – Other Deductions
 Health Savings Account Deduction – ratio equal to ND income
divided by total income
 Alimony – ratio equal to ND Income divided by total income
 Medical Savings Account – ratio equal to ND compensation
divided by total compensation from employer sponsoring MSA
 DPAD – portion based on ND income
Page 4

Line 20 – Farmers who used Schedule J (Income Averaging), see
Schedule ND-1FA for alternative calculation
 Farm Income Averaging
o Elect to treat a portion of current year taxable income from
farming as if it had been taxed at the marginal tax rates
applicable to the prior three years
 Taxpayer is not required to income average in ND if they income
average on the federal return
 ND income tax rates were reduced in 2011, so income averaging
may not be beneficial in ND in 2012 and 2013
 Qualified Endowment Fund Credit
o 40% of charitable contributions to a qualified endowment fund
 Qualified endowment fund is a permanent, irrevocable fund by a North
Dakota tax exempt charitable organization
 Charitable organization must have a physical location in ND
 Charitable gift must be at least $5,000
 Maximum gift is $25,000 (single) & $50,000 (MFJ) for a maximum credit
of $10,000 (single) and $20,000 (MFJ)
 Credit can be carried forward for up to 3 years
o Contribution that credit is based on must be added back to ND taxable income on
page 1 of Form ND-1
 Housing Incentive Fund Credit
o For 2011 and 2012 tax years only
 ND tax credit for contribution to the housing incentive fund administered
by the ND Housing Finance Agency
 Credit is equal to amount contributed
 Maximum total contribution is $15 million, currently $9 million has been
contributed (as of 9/15/12)
 Can be carried forward for up to 10 years
o Contribution that credit is based on must be added back to ND taxable income on
page 1 of Form ND-1
Page 5
Wisconsin Supplemental Handout
1NPR
Nonresident & part-year resident
DO NOT STAPLE
Wisconsin income tax
Check here
if this is an
amended
return
2012
For the year Jan. 1-Dec. 31, 2012,
or other tax year
beginning:
, 2012
ending:
, 20
.
Your legal last name
Legal first name
M.I.
Your social security number
If a joint return, spouse’s legal last name
Spouse’s legal first name
M.I.
Spouse’s social security number
Home address (number and street). If you have a PO Box, see page 7
PAPER CLIP withholding statements here
City or post office
Filing status
Single
State
Apt. no.
Check below then fill in either the name of Wisconsin city,
village, or town, and the county in which you lived at the
end of 2012 or before leaving Wisconsin (nonresidents
leave blank).
City
Village
Town
City, village,
or town
Special
Conditions
2
1
0
2 FT
9 A
R
D
County of
Married filing joint return (even if only one had income)
Married filing separate return.
Fill in spouse’s SSN above and
full name here..........................
Legal
last name
School district number (see page 39)
M.I.
Legal
first name
Head of household (with qualifying person), (see page 7).
Also, check here if married.
Resident status Check the status that applies
You
Spouse
Full-year resident of Wisconsin
Part-year resident of Wisconsin from
Income
PAPER CLIP check or money order here
Tax district
Zip code
Nonresident of Wisconsin; state of residence
I-050
Print numbers like this 
Not like this 
mm
(2-letter state abbreviation)
dd
yyyy
to
mm
dd
NO COMMAS
NO CENTS
yyyy
Note: Complete residence questionnaire, page 47.
A. Federal column
B. Wisconsin column
1 Wages, salaries, tips, etc. (see page 10) . . . . . . . . . . . . . . . . . . . . . . . . . 1
.00
.00
2 Taxable interest (see page 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
.00
.00
3 Ordinary dividends (see page 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4 Taxable refunds, credits, or offsets of state and local income taxes
(from federal Form 1040, line 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
.00
.00
.00
5 Alimony received (from federal Form 1040, line 11) . . . . . . . . . . . . . . . . . 5
.00
.00
6 Business income or (loss) (from federal Form 1040, line 12) . . . . . . . . . . 6
.00
.00
7 Capital gain or (loss) (see page 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
.00
.00
8 Other gains or (losses) (from federal Form 1040, line 14) . . . . . . . . . . . . 8
.00
.00
9 IRA distributions (see page 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
.00
.00
.00
.00
.00
.00
12 Farm income or (loss) (from federal Form 1040, line 18) . . . . . . . . . . . . . 12
.00
.00
13 Unemployment compensation (see page 14) . . . . . . . . . . . . . . . . . . . . . . 13
.00
.00
14 Social security benefits (see page 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
.00
15 Other income (see pages 15-21). Enclose explanation . . . . . . . . . . . . . . 15
.00
.00
16 Add lines 1 through 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
.00
.00
10 Pensions and annuities (see page 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11 Rental real estate, royalties, partnerships, S corporations, trusts, etc.
(from federal Form 1040, line 17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Not taxable
Not taxable
2012 Form 1NPR Name
SSN
Page 2
A. Federal column
Adjustments to Income
17RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
of 4
B. Wisconsin column
Not deductible for Wisconsin
18 Certain business expenses of reservists, performing artists, and
fee-basis government officials (see page 21) . . . . . . . . . . . . . . . . . . . . . . 18
19 Health savings account deduction (see page 21) . . . . . . . . . . . . . . . . . . . 19
.00
.00
.00
.00
20 Moving expenses (see page 21) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
.00
.00
21 Deductible part of self-employment tax (from federal Form 1040, line 27). . . 21
.00
.00
22 Self-employed SEP, SIMPLE, and qualified plans (see page 21) . . . . . . . 22
.00
.00
23 Self-employed health insurance deduction (see page 21) . . . . . . . . . . . . 23
24 Penalty on early withdrawal of savings (from federal Form 1040, line 30) . . . 24
.00
.00
.00
.00
25 Alimony paid (from federal Form 1040, line 31a) . . . . . . . . . . . . . . . . . . . 25
.00
.00
26 IRA deduction (see page 22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
.00
.00
.00
.00
27 Student loan interest deduction (see page 22) . . . . . . . . . . . . . . . . . . . . . 27
28RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
29 Domestic production activities deduction (see page 22) . . . . . . . . . . . . . 29
2
1
0
2 FT
9 A
R
D
30 Other adjustments included in federal Form 1040, line 36
(list type and amount) 30
.00
.00
31 Total adjustments to income. Add lines 17 through 30 . . . . . . . . . . . . . . 31
.00
.00
Adjusted Gross Income
.00
32 Wisconsin income. Subtract line 31, column B from line 16, column B . . . 32
33 Federal income. Subtract line 31, column A from line 16, column A . . . . . 33
.00
34 Divide line 32 by line 33. Carry the decimal to four places. If amount
on line 32 is more than amount on line 33, fill in 1.0000. (See page 22) . . . . 34
.
Tax Computation
35 Fill in the larger of Wisconsin income from line 32, column B or federal income from line 33,
column A. But, if Wisconsin income from line 32 is zero or less, fill in 0 (zero) . . . . . . . . . . . . . . . 35
.00
36aIf you (or your spouse) can be claimed as a dependent on anyone else’s return, check here
and see the “Exception” in the instructions for line 36c on page 22 . . . . . . . . . . . . . . . . . . . . . . . . 36a
36bAliens (see page 22 to determine if you must check line 36b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36b
36cFind the standard deduction for amount on line 33 using table on page 37 . . . . . . . . . . . . . . . . . . 36c
.00
37 Subtract line 36c from line 35. If line 36c is more than line 35, fill in 0 (zero) . . . . . . . . . . . . . . . . . 37
.00
38 Exemptions (Caution: see page 23)
a Fill in exemptions from your federal return x $700 . . . 38a
.00
b Check if 65 or older x $250 . . 38b
.00
You +
Spouse =
c Add lines 38a and 38b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38c
.00
39 Subtract line 38c from line 37. If line 38c is more than line 37, fill in 0 (zero) . . . . . . . . . . . . . . . . . 39
.00
40 Tax (see table on page 40) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
.00
41 Itemized deduction credit. Complete Schedule 1 (page 4, Form 1NPR) . . . . 41
.00
42 School property tax credits (part-year and full-year residents only)
a Rent paid in 2012–heat included
Rent paid in 2012–heat not included
b Property taxes paid on home in 2012
.00
.00
.00
}
Find credit from
table page 24 . . . . 42a
.00
Find credit from
table page 25 . . . . 42b
.00
43 Add credits on lines 41, 42a, and 42b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
.00
44 Subtract line 43 from line 40. If line 43 is more than line 40, fill in 0 (zero) . . . . . . . . . . . . . . . . . . 44
.00
45 Fill in ratio from line 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
46 Multiply line 44 by ratio on line 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
x .
.00
Page 3
Your social security number
2012 Form 1NPR
Name(s) shown on Form 1NPR
47 Fill in amount from line 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
48 Armed forces member credit. (Full-year Wisconsin residents only) . . . . . 48
.00
49 Historic rehabilitation credits. Enclose Schedule HR . . . . . . . . . . . . . . . . 49
.00
50 Working families tax credit. (Full-year Wisconsin residents only) . . . . . . . 50
.00
of 4
.00
.00
51 Certain nonrefundable credits from line 8 of Schedule CR . . . . . . . . . . . . . 51
52 Add lines 48 through 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
.00
53 Subtract line 52 from line 47. If line 52 is more than line 47, fill in 0 (zero) . . . . . . . . . . . . . . . . . . 53
.00
54 Alternative minimum tax. Enclose Schedule MT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
.00
55 Add lines 53 and 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
.00
56 Married couple credit. Complete Schedule 2 (page 4, Form 1NPR) . . . . . 56
.00
57 Other credits from Schedule CR, line 21. Enclose Schedule CR . . . . . . 57
.00
58
.00
58 Net income tax paid to another state. Enclose Schedule OS . . . . 59 Add lines 56, 57, and 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
.00
60 Subtract line 59 from line 55. If line 59 is more than line 55, fill in 0 (zero). This is your net tax . . . 60
.00
61 Economic development surcharge. Enclose Schedule EDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
.00
62 Sales and use tax due on Internet, mail order, or other out-of-state purchases (see page 28) . . . 62
If you certify that no sales or use tax is due, check here . . . . . . . . . . . . . . . . . . . . . . . . . . .
.00
2
1
0
2 FT
9 A
R
D
63 Donations (decreases refund or increases amount owed)
.00
f Firefighters memorial . . . . . . .
.00
b Packers football stadium .00
g Military family relief . . . . . . . . .
.00
c Cancer research . . . . . . .00
h Second Harvest/Feeding Amer. .00
.00
i Red Cross WI Disaster Relief .
.00
.00
.00
j Special Olympics . . . . . . . . . .
Total (add lines a through j) . . . 63k
a Endangered resources d Veterans trust fund . . . . e Multiple sclerosis . . . . . . .00 x .33 = 64
.00
65 Credit repayments and other penalties (see page 29) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
.00
66 Add lines 60 through 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
.00
64 Penalties on IRAs, other retirement plans, MSAs, etc. (see page 29) Payments and Credits
67 Wisconsin income tax withheld. Enclose readable withholding statements . . . 67
.00
68 2012 Wisconsin estimated tax paid and amount applied from 2011 return . . . 68
.00
69 Earned income credit. (Full-year Wisconsin residents only)
Number of qualifying children
.00 x
Federal credit . . . . . . . . . . . . . . . . . . . . . .00
% = 69
70 Farmland preservation credit. a. Schedule FC, line 18 . . . . . . . . . . . . . . . 70a
.00
.00
b. Schedule FC-A, line 13 . . . . . . . . . . . . . 70b
71 Repayment credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
.00
72 Homestead credit. (Full-year Wisconsin residents only) . . . . . . . . . . . . . . . . 72
.00
73 Eligible veterans and surviving spouses property tax credit . . . . . . . . . . . . . 73
.00
74 Refundable credits from Schedule CR, line 32 . . . . . . . . . . . . . . . . . . . . . . . 74
.00
75 AMENDED RETURN ONLY – amount previously paid (see page 32) . . . . . . 75
.00
76 Add lines 67 through 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
.00
77 AMENDED RETURN ONLY – amounts previously refunded (see page 33) . . 77
.00
78 Subtract line 77 from line 76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
I-050a
.00
.00
2012 Form 1NPR Paper clip a copy of your federal income
tax return and schedules to this return.
Page 4
SSN
of 4
Refund or Amount You Owe
79 If line 78 is more than line 66, subtract line 66 from line 78. This is the AMOUNT YOU OVERPAID 79
.00
80 Amount of line 79 you want REFUNDED TO YOU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
.00
.00
81 Amount of line 79 to be APPLIED TO YOUR 2013 ESTIMATED TAX . . . . . 81
.00
82 If line 78 is less than line 66, subtract line 78 from line 66 . . . . . This is the AMOUNT YOU OWE  82
83 Underpayment interest. Fill in exception code – see Sch. U 
Also include on line 82 (see page 34).
.00
83
Third Do you want to allow another person to discuss this return with the department (see page 34)?
Party
Designee’s
Phone
no. ()
Designee name
Yes Complete the following.
No
Personal
identification
number (PIN)
Under penalties of law, I declare that this return and all attachments are true, correct, and complete to the best of my knowledge and belief.
Sign
here
Your signature
Spouse’s signature (if filing jointly, BOTH must sign)
Mail your return to: Wisconsin Department of Revenue
(if tax is due)
(if refund or no tax due)
(if amended return)
PO Box 268 PO Box 59 PO Box 8991
Madison WI 53790-0001 Madison WI 53785-0001 Madison WI 53708-8991
2
1
0
2 FT
9 A
R
D
Date
For Department
Use Only
C
Schedule 1 – Wisconsin Itemized Deduction Credit (see line 41 instructions)
.00
.00
.00
1 Medical and dental expenses from line 4, federal Schedule A. See instructions for exceptions . . . . . 1
2
Interest paid from line 15, federal Schedule A. See instructions for exceptions . . . . . . . . . . . . . . . . . 2
3
Gifts to charity from line 19, federal Schedule A. See instructions for exceptions . . . . . . . . . . . . . . . 3
4
Casualty losses from line 20, federal Schedule A only if the loss is directly related to a
federally-declared disaster . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5
Add lines 1 through 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6a Wisconsin standard deduction from Form 1NPR, line 36c . . . . . . . . . . . . . . . . 6a
6b Ratio from Form 1NPR, line 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6b x
.
.00
.00
.00
6c Multiply line 6a by ratio on line 6b. Fill in the result on line 6c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6c
7
Subtract line 6c from line 5. If line 6c is more than line 5, fill in 0 (zero) . . . . . . . . . . . . . . . . . . . . . . . 7
8
Rate of credit is .05 (5%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9
Multiply line 7 by line 8. Fill in here and on line 41 of Form 1NPR . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Schedule 2 – Married Couple Credit
x .05
.00
.00
.00
May be claimed only when both spouses have earned income taxable by Wisconsin.
(A) YOURSELF
(B) YOUR SPOUSE
1 Wages, salaries, tips, etc., included in column B of line 1 on Form 1NPR.
Do not include deferred compensation (even though reported on a W‑2) or
taxable scholarships or fellowships not reported on a W‑2. . . . . . . . . . . . . . . 1
.00
.00
2 Net profit or (loss) from self-employment from federal Schedules C, C-EZ,
and F (Form 1040), Schedule K-1 (Form 1065), and any other taxable self employment or earned income included in column B on Form 1NPR. . . . . . . 2
.00
.00
.00
.00
.00
.00
.00
.00
3 Combine lines 1 and 2. This is your total Wisconsin earned income. . . . . . . . 3
4 Add amounts on Form 1NPR, lines 18, 22, 26, and 30, column B. Fill in the
total of these adjustments that apply to your or your spouse’s earned income. 4
5 Subtract line 4 from line 3. This is your qualified earned income . . . . . . . . . . 5
6 Compare the amount in columns (A) and (B) of line 5. Fill in the
smaller amount here. If more than $16,000, fill in $16,000. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7 Rate of credit is .03 (3%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8 Multiply line 6 by line 7. Round the result and fill in here and on line 56 of Form 1NPR.
Do not fill in more than $480. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
x .03
.00
.00
M1
1111
201111
2011 Individual Income Tax
Leave unused boxes blank. Do not use staples on anything you submit.
Your first name and initial
Place
If joint return, spouse's first name & initial
an X If a
Foreign
Address: Current home address (street, apartment number, route)
Last name
Your Social Security number
Last name
Spouse's Social Security number
Place an X if a
new address
t
City
2011 Federal
Filing Status (place an X in
one oval box):
State
(1) Single
(4) Head
of
household
(2) Married
filing joint
(5) Qualifying
widow(er)
Zip code
Your date of birth (mmddyyyy)
Spouse's date of birth
(3) Married
filing separate:
Enter spouse’s name and
Social Security number here
Wisconsin Residents Working in Minnesota: Was any of your income from personal or profes-
Yes
sional services performed in Minnesota while a Wisconsin resident? (see instructions, page 17) No
NoYes
If yes, enter
Minnesota income:
Minnesota Residents Working in Wisconsin: Was any of your income from personal or profes-
Yes
No
sional services performed in Wisconsin while a Minnesota resident? (see instructions, page 17) NoYes
If yes, enter
Wisconsin income:
State Elections Campaign Fund
If you want $5 to go to help candidates for state offices pay campaign expenses, you may each enter the code number for the party of your choice.
This will not increase your tax or reduce your refund.
Political Party and Code Number:
Democratic Farmer-Labor . . 11 Green . . . . . . . . . . . . . . . . . . 14
Independence . . . . . . . . . . . 12 Grassroots . . . . . . . . . . . . . . . . 15
Republican . . . . . . . . . . . . . . 13 General Campaign Fund . . . . 16
Your Code:
Spouse's Code:
From Your Federal Return (for line references see instructions, page 10), enter the amount of:
D Federal adjusted gross income:
A Wages, salaries, tips, etc.:
B IRA, Pensions and annuities: C Unemployment: If negative
number, use a minus sign (-)
00
Do not send W-2s. Enclose Schedule M1W to
claim Minnesota withholding.
1
2
00
t
00
00
Federal taxable income (from line 43 of federal Form 1040,
line 27 of Form 1040A or line 6 of Form 1040EZ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
State income tax or sales tax addition. If you itemized deductions
on federal Form 1040, complete the worksheet on page 10 of the instructions . . . . . . 2
If negative number, use a minus sign (-)
t
00
00
3 Other additions to income, including non-Minnesota bond interest, disallowed
standard or itemized deductions and personal exemptions
(see instructions, page 11; enclose Schedule M1M) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
00
If negative number, use a minus sign (-)
4 Add lines 1 through 3 (if a negative number, place an X in the oval box) . . . . . . . . . . . . 4
00
5State income tax refund from line 10 of federal Form 1040 . . . . . . . . . . . . . . . . . . . . . . 5
6 Other subtractions, such as net interest or mutual fund dividends from U.S. bonds
or K-12 education expenses (see instructions, page 11; enclose Schedule M1M) . . . 6
00
00
7 Total subtractions. Add lines 5 and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
00
8 Minnesota taxable income. Subtract line 7 from line 4. If zero or less, leave blank. . . . . . 8
00
9 Tax from the table on pages 24–29 of the M1 instructions . . . . . . . . . . . . . . . . . . . . . . 9
00
10 Alternative minimum tax (enclose Schedule M1MT) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
00
11 Add lines 9 and 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12 Full-year residents: Enter the amount from line 11 on line 12. Skip lines 12a and 12b.
00
Part-year residents and nonresidents: From Schedule M1NR, enter the tax from line 27 on
line 12, from line 23 on line 12a, and from line 24 on line 12b (enclose Schedule M1NR) . . . . 12
a. 00
b.
13Tax on lump-sum distribution (enclose Schedule M1LS) . . . . . . . . . . . . . . . . . . . . . . . 13
00
14 Tax before credits. Add lines 12 and 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
00
201112
1112
2011 M1, page 2
00
17 Credit for taxes paid to another state (enclose Schedule M1CR) . . . . . . . . . . . . . . . . . . . . . 17
00
18 Other nonrefundable credits (enclose Schedule M1C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
00
19 Total nonrefundable credits. Add lines 16 through 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
00
20 Subtract line 19 from line 15 (if result is zero or less, leave blank) . . . . . . . . . . . . . . . . . . . 20
21 Nongame Wildlife Fund contribution (see instructions, page 15)
This will reduce your refund or increase amount owed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
00
22 Add lines 20 and 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
23 Minnesota income tax withheld. Complete and enclose Schedule M1W to report Minne sota withholding from W-2, 1099 and W-2G forms (do not send in W-2s, 1099s, W-2Gs) . . . 23
00
24 Minnesota estimated tax and extension (Form M13) payments made for 2011 . . . . . . . . .
25 Child and Dependent Care Credit (enclose Schedule
M1CD). Enter number of qualifying persons here: . . . . . . . .
26 Minnesota Working Family Credit (enclose Schedule
M1WFC). Enter number of qualifying children here: . . . . . . . .
27 K–12 Education Credit (enclose Schedule M1ED).
Enter number of qualifying children here: . . . . . . . .
24
00
25
00
26
00
27
00
28 Business and investment credits (enclose Schedule M1B) . . . . . . . . . . . . . . . . . . . . . . . . . . 28
00
29 Total payments. Add lines 23 through 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
00
30 REFUND. If line 29 is more than line 22, subtract line 22 from line 29
(see instructions, page 19). For direct deposit, complete line 31 . . . . . . . . . . . . . . . . . . . . . 30
31 Direct deposit of your refund (you must use an account not associated with a foreign bank):
00
▼ ▼ ▼
15 Tax before credits. Amount from line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16 Marriage credit for joint return when both spouses have taxable earned income
or taxable retirement income (enclose Schedule M1MA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Account type
32
33
Checking
Routing number
00
00
00
Account number
Savings
AMOUNT YOU OWE. If line 22 is more than line 29, subtract
Make check out to Minnesota Revline 29 from line 22 (see instructions, page 19) . . . . . . . . . . . . . . enue
. . . .and
. . send
. . . with
. . . Form
. . . M60
. . . . . 32
Penalty amount from Schedule M15 (see instructions, page 19). Also subtract
this amount from line 30 or add it to line 32 (enclose Schedule M15) . . . . . . . . . . . . . . . . 33
00
00
IF YOU PAY ESTIMATED TAX and want part of your refund credited to estimated tax, complete lines 34 and 35.
34 Amount from line 30 you want sent to you . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
00
35 Amount from line 30 you want applied to your 2012 estimated tax . . . . . . . . . . . . . . . . . . . 35
00
I declare that this return is correct and complete to the best of my knowledge and belief.
Your signature
Date
Spouse’s signature (if filing jointly)
Paid preparer: You must sign below.
Paid preparer's signature
Date
_____________________________ ___________________
Daytime phone
Preparer's daytime phone
SSN, PTIN or VITA/TCE #
_____________________________ _____________________________________________________________________
Include a copy of your 2011 federal return and schedules.
Mail to: Minnesota Individual Income Tax
St. Paul, MN 55145-0010
To check on the status of your refund, visit www.revenue.state.mn.us
I authorize the Minnesota Department of
Revenue to discuss this return with my
paid preparer or the third-party designee
indicated on my federal return.
I do not want my paid
preparer to file my return
electronically.
2011 Schedule M1NR, Nonresidents/Part-Year Residents
Sequence #7
Your Last Name
Social Security Number
Your Residency
Status in 2011:
Nonresident of Minnesota; Resident of
Minnesota Resident From
to
(state)
(mm/dd/yyyy)
Spouse’s Last Name
Spouse’s Social Security Number
Spouse’s 2011
Residency Status:
Nonresident of Minnesota; Resident of
Minnesota Resident From
to
(state)
(mm/dd/yyyy)
Tax Calculation
Deductions and Subtractions
Income
instructions for this schedule, which are on a separate sheet. Before you can
Read the
this schedule, you must complete lines 1 through 11 of Form M1.
complete
1 Wages, salaries, tips, etc. (from line 7 of federal
Form 1040 or 1040A or line 1 of Form 1040EZ) . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 Taxable interest and ordinary dividend income (add lines 8a and 9a
of Form 1040 or 1040A or from line 2 of Form 1040EZ ) . . . . . . . . . . . . . . . . . . . 2
A. Total Amount
B. Minnesota Portion
(see instructions)
3 Business income or loss (from line 12 of Form 1040) . . . . . . . . . . . . . . . . . . . . . . 3
4 Capital gain or loss (from line 13 of
Form 1040 or line 10 of Form 1040A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5 IRA distributions and pensions and annuities (add lines 15b and
16b of Form 1040, or lines 11b and 12b of Form 1040A) . . . . . . . . . . . . . . . . . . 5
6 Net income from rents, royalties, partnerships, S corporations,
estates and trusts (from line 17 of Form 1040) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7 Farm income or loss (from line 18 of Form 1040) . . . . . . . . . . . . . . . . . . . . . . . . . 7
8 Other income (add lines 10, 11, 14, 19, 20b and 21 of Form 1040,
or lines 13 and 14b of Form 1040A, or from line 3 of 1040EZ) . . . . . . . . . . . . . . 8
9 Interest and dividends from non-Minnesota state or municipal bonds
(add lines 4 and 5 of Schedule M1M) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10 Other additions required by Minnesota
(add lines 6, 7, 10, 13 and 15 of Schedule M1M) . . . . . . . . . . . . . . . . . . . . . . . . 10
11 Add lines 1 through 10 for each column . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
If your Minnesota gross income is below the minimum filing requirement, see the
instructions under “Who must file” on how to complete the rest of this schedule.
12 Educator expenses and certain business expenses (add lines 23
and 24 of Form 1040 or from line 16 of Form 1040A) . . . . . . . . . . . . . . . . . . . . 12
13 Self-employed SEP, SIMPLE and qualified plans and IRA deduction
(add lines 28 and 32 of Form 1040, or from line 17 of Form 1040A) . . . . . . . . 13
14 Health savings account and Archer MSA deductions (add line 25 of Form
1040 and the Archer MSA amount included on line 36 of Form 1040) . . . . . . 14
Moving expenses (from line 26 of Form 1040) . . . . . . . . . . . . . . . . . . . . . . . . . . 15
One-half of self-employment tax and self-employed health insurance
(add lines 27 and 29 of Form 1040) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Deductions for alimony paid, student loan interest and
tuition and fees (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
15
16
17
18 Penalty on early withdrawal of savings (from line 30 of Form 1040) . . . . . . . . .
19 Other subtractions required by Minnesota
(from lines 21, 22, 35 and 36 of Schedule M1M) . . . . . . . . . . . . . . . . . . . . . . . .
20 Net U.S. bond interest (from line 18 of Schedule M1M) and active military pay
received while a nonresident (from line 29 of Schedule M1M) . . . . . . . . . . . . .
21 Job Opportunity Building Zone (JOBZ) business and investment
income exemptions (from line 32 of Schedule M1M) . . . . . . . . . . . . . . . . . . . . .
18
19
20
21
22 Add lines 12 through 21 for each column . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
23 Subtract line 22, column B, from line 11, column B. Enter here and on line 12a of Form
M1. If you’re below the filing requirement or the result is a negative amount, enter 0 . . . . . . . . . . . . . . . . 23
24 Subtract line 22, column A, from line 11, column A.
Enter the result here and on line 12b of Form M1 . . . . . . . . . . . . . . . . . . . . . . . . 24
25 Divide line 23 by line 24, and enter the result as a decimal (carry to five decimal
places). If line 23 is more than line 24, enter 1.0. If line 23 is zero, enter 0 . . . . . . . . . . . . . . . . . . . . . . . . 25
.
26 Amount from line 11 of Form M1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
27 Multiply line 25 by line 26. Enter the result here and on line 12 of Form M1 . . . . . . . . . . . . . . . . . . . . . . . 27
You must include this schedule with Form M1. Also enter amounts from lines 23 and 24 of this schedule on Form M1, lines 12a and 12b.
20 1155
2011 Schedule M1M, Income Additions and Subtractions
Sequence #3
Complete this schedule to determine line 3 and line 6 of Form M1.
Your First Name and Initial
Last Name
Your Social Security Number
Additions to Income
1 If you took the standard deduction on your federal return, enter $1,950 if married filing joint or
qualifying widow(er), or $975 if married filing separate. Otherwise, skip this line . . . . . . . . . . . . . . . 1
2
3
4
Limitation on itemized deductions for taxpayers with an adjusted gross income
that exceeds the applicable threshold (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Phase out of personal exemption(s) for taxpayers with an adjusted gross income
that exceeds the applicable threshold (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Interest from municipal bonds of another state or its governmental units
included on line 8b of federal Form 1040 or 1040A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5 Federally tax-exempt dividends from mutual funds investing in bonds of another state
or its governmental units included on line 8b of federal Form 1040 or 1040A . . . . . . . . . . . . . . . . . 5
6 Federal bonus depreciation addition (determine from worksheet in the instructions) . . . . . . . . . . . 6
7Federal section 179 expensing addition (determine from worksheet in the instructions) . . . . . . . . 7
8State income taxes passed through to you as a partner of a partnership,
a shareholder of an S corporation or a beneficiary of a trust (see instructions) . . . . . . . . . . . . . . . . 8
9 Domestic production activities deduction (from line 35 of federal Form 1040) . . . . . . . . . . . . . . . . 9
10 Expenses deducted on your federal return attributable to income not taxed
by Minnesota (other than interest or mutual fund dividends from U.S. bonds) . . . . . . . . . . . . . . . . 10
11 If you are an employer who provides prescription drug coverage to your retirees, enter
the amount of federal tax-exempt subsidies you received for continuing these benefits . . . . . . . 11
12 Fines, fees and penalties federally deducted as a trade or business expense
(see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13 Suspended loss from 2001 through 2005, 2008, 2009 or 2010 on your federal return that
was generated by bonus depreciation (determine from worksheet in the instructions) . . . . . . . . 13
14 Capital gain portion of a lump-sum distribution
(from line 6 of federal Form 4972; enclose Form 4972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15 Net operating loss carryover adjustment (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16 This line intentionally left blank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
17 Add lines 1 through 16. Enter the total here and on line 3 of Form M1 . . . . . . . . . . . . . . . . . . . . . . 17
Subtractions are on the back of this schedule.
201152
2011 M1M, page 2
Your First Name and Initial
Last Name
Your Social Security Number
Subtractions From Income
18 Net interest or mutual fund dividends from U.S. bonds (see instructions) . . . . . . . . . . . . . . . . . . . 18
19 Education expenses you paid for your qualifying children in grades K–12 (see instructions)
Enter the name and grade of each child: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
20 If you did not itemize deductions on your federal return and your charitable
contributions were more than $500, see instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21 Subtraction for federal bonus depreciation added back to Minnesota taxable income
in 2006 through 2010 (determine from worksheet in the instructions) . . . . . . . . . . . . . . . . . . . . . .
22 Subtraction for federal section 179 expensing added back to Minnesota
taxable income in 2006 through 2010 (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23 Subtraction for persons age 65 or older, or permanently
and totally disabled (enclose Schedule M1R) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24 Benefits paid by the Railroad Retirement Board (included on lines 7, 16b,
19 and 20b of Form 1040 or lines 7, 12b, 13 and 14b of Form 1040A) . . . . . . . . . . . . . . . . . . . .
25 If you are a resident of a reciprocity state filing Form M1 only to receive a refund
of all Minnesota tax withheld, enter the amount from line 1 of Form M1.
If the amount is a negative number (less than zero), enter zero . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
21
22
23
24
25
[
• Place an X in one box to indicate the reciprocity state
of which you were a resident during 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Michigan:
North Dakota:
26 American Indians: Total amount earned on an Indian reservation while
living on the reservation, to the extent the income is federally taxable . . . . . . . . . . . . . . . . . . . . . . 26
27 Federal active duty military pay received for services performed while a Minnesota resident,
to the extent the income is federally taxable. Do not include military pensions . . . . . . . . . . . . . . . 27
28 If you are a member of the Minnesota National Guard or other reserve component
in Minnesota, see instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
29 If you are a resident of another state, enter your federal active service military pay,
to the extent the income is federally taxable. Do not include military pensions . . . . . . . . . . . . . . . 29
30 If you, your spouse (if filing a joint return) or your dependent donated all
or part of a human organ, enter your unreimbursed expenses for travel
and lodging and for any lost wages net of sick pay (see instructions) . . . . . . . . . . . . . . . . . . . . . . . 30
31 Income taxes paid to a subnational level of a foreign country other than Canada
(determine from worksheet in the instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
32 Job Opportunity Building Zone (JOBZ) business and investment
income exemptions (enclose Schedule JOBZ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
33 Portion of the gain from the sale of your farm property if you were insolvent
at the time of the sale (determine from worksheet in the instructions) . . . . . . . . . . . . . . . . . . . . . . 33
34 Post service education awards received for service in an
AmeriCorps National Service program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
35
36
37
Net operating loss (NOL) carryover adjustment (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Subtraction for prior addback of reacquisition of business indebtedness income
included in federal taxable income (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
This line intentionally left blank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
38 Add lines 18 through 37. Enter the total here and on line 6 of Form M1 . . . . . . . . . . . . . . . . . . . . . 38
You must include this schedule with your Form M1.
2011 Schedule M1M Instructions
Income Additions and Subtractions
What’s New for 2011?
Minnesota has adopted all of the Internal
Revenue Code (IRC) changes made to
“federal taxable income” from March 18,
2010, through April 14, 2011, effective the
same date as the federal changes.
Even though all the changes were adopted
for the definition of federal taxable
income — which is the starting point on
the Minnesota return — the following
modifications are added to federal taxable
income to arrive at Minnesota taxable
income:
• the increase in the federal standard
deduction for married taxpayers and
those filing as qualifying widow(er);
• the limitation on itemized deductions;
and
• the phase out of personal and dependent exemptions.
In addition, several modifications that
Minnesota did not conform to in the past
were fully adopted or no longer apply at
the federal level, beginning with tax year
2011. As a result, the following lines have
been removed from Schedule M1M:
• the additional standard deduction for
real estate taxes and/or motor vehicle
sales tax;
• the educator expenses and college
tuition and fees deduction; and
• discharge of indebtedness income addition.
Important note: Minnesota continues to
require an 80 percent addback for bonus
depreciation and section 179 expensing.
Line Instructions
You may have received the addition or
subtraction as an individual, as a partner
of a partnership, as a shareholder of an S
corporation, or as a beneficiary of a trust.
If you are a partner, shareholder or beneficiary, the amounts will be reported on the
Schedule KPI, KS or KF you received from
the entity.
Additions
The amounts you enter on lines 1 through
16 will be added to your taxable income.
Line 2
Limitation on Itemized Deductions
If your adjusted gross income exceeds the
applicable threshold ($84,775 for married
filing separate or $169,550 for all other
filers), you are required to add back the
amount that would have been limited
under prior federal law for itemized
deduction. See Worksheet for Line 2 below.
Line 3
Phaseout of Personal and Dependent
Exemptions
If your adjusted gross income exceeds
the applicable threshold ($254,350 for
married filing joint; $211,950 for head
of household; $169,550 for single; and
$127,175 for married filing separate), you
are required to add back the amounts
that would have been phased out when
determining personal exemptions under
prior federal law. See Worksheet for Line 3
on page M1M-2.
Continued
Worksheet for Line 2
1 Enter the amount from Schedule A, line 29 . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 Enter the total of the amounts from Schedule A, lines 4, 14 and 20,
plus any gambling and casualty or theft losses included on line 28 . . . . . . .
3 Is step 2 less than step 1?
No. STOP here and enter zero on Schedule M1M, line 2.
Yes. Subtract step 2 from step 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 Multiply step 3 by 80% (.80) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Enter the amount from Form 1040, line 38 . . . . . . . . . . . . . . . 6 Enter: $169,550 ($84,775 if married filing separately) . . . . . . . 7 Is step 6 less than step 5?
You do not have a line 2 addition.
Yes. Subtract step 6 from step 5 . . . . . . . . . . . . . . . . . . . . . . 8 Multiply step 7 by 3% (.03) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Enter the smaller of step 4 or step 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 Amount from Form M1, line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11 Add step 9 and step 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12 Enter the amount from step 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Enter amount corresponding to your filing status:
• Single: $5,800
• Married filing separately: $4,825
• Head of household: $8,500
• Married filing jointly or qualifying widow(er): $9,650 . . . . 14 Subtract step 13 from step 12 (If result is zero or less, enter zero
here and on step 15. Also enter zero on Schedule M1M, line 2) . . . . . . . . . . . .
15 Compare the amounts on step 11 and step 14.
• If step 11 is less than or equal to step 14, enter step 9 here and on Schedule
M1M, line 2 (if married filing separately, see instructions below); OR
• If step 11 is more than step 14, subtract step 10 from step 14
(if result is zero or less, enter zero). Enter the result here and on
Schedule M1M, line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Married couples filing separate returns: Each spouse must complete a separate Worksheet for Line 2. If either spouse is required to add back 100 percent of his/her step 9, your
addition is the lesser of:
• your step 9; or
• the difference between your step 1 and your step 10.
M1M-1
Line 4
Interest From Municipal Bonds of Another State or its Governmental Units
Of the amount you included or should
have included on line 8b of federal Form
1040 or Form 1040A, add the interest you
received from municipal bonds issued by:
• a state other than Minnesota, and
• a local government (such as a county or
city) in a state other than Minnesota.
Line 5
Federally Tax-Exempt Dividends from
Mutual Funds Investing in Bonds of
Another State
If you included or should have included
an amount on line 8b of federal Form
1040 or Form 1040A for federally taxexempt interest dividends from a mutual
fund, you may have to include some or all
of these dividends on line 2. To determine the amount to include, follow these
instructions:
• If 95 percent or more of a federally
tax-exempt dividend from a mutual
fund came from bonds issued by Minnesota, only the portion of the dividend
generated by non-Minnesota bonds
must be included on line 2.
• If less than 95 percent of the federally
tax-exempt interest dividend from a
mutual fund came from bonds issued by Minnesota, all of the federally
tax-exempt interest dividend from that
fund must be included on line 2.
Line 6
Federal Bonus Depreciation Addition
If you chose the special depreciation allowance for qualified property on federal
Form 1040, you must add back 80 percent
of the bonus depreciation to your taxable
income. See Worksheet for Line 6 on this
page.
Line 7
Federal Section 179 Expensing
If, during the year, your total investment in qualifying property was more
than $200,000, or if you elected more
than $25,000 in section 179 expensing,
you must add back on your state return
80 percent of the difference between the
expensing allowed for federal and for
state tax purposes. You may subtract the
amount of the addition in equal parts
over the next five years.
Continued
1 Is the amount on federal Form 1040, line 38, or Form 1040A, line 22,
more than the amount on step 4 below for your filing status?
Yes. Continue with step 2.
2 Enter your exemptions from Form 1040, line 42, or Form 1040A, line 26 . . . . . . 3 Enter amount from Form 1040, line 38, or Form 1040A, line 22 . .
4 Enter the amount provided for your filing status:
• Single: $169,550
• Married filing jointly or qualifying widow(er): $254,350
• Married filing separately: $127,175
• Head of household: $211,950 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Subtract step 4 from step 3 and enter result here . . . . . . . . . . . . . . . Is step 5 equal to or less than $122,500 ($61,250 if married filing separately)?
No. You must add back your personal exemption amount. Enter amount from step 2
on step 8 and on Schedule M1M, line 3. Do not complete the rest of the worksheet.
Yes. Continue with step 6.
6 Divide step 5 by $2,500 ($1,250 if married filing separately).
If the result is not a whole number, increase it to the next
higher whole number (Example: Increase 0.0004 to 1) . . . . . . . . . . 7 Multiply step 6 by 2% (.02). Enter the result as a decimal . . . . . . . . . . . . . . . . . . . . .
8Multiply step 2 by step 7. Enter result here and on Schedule M1M, line 3 . . . . . . Worksheet for Line 6
1 Add line 14 and line 25 of your federal Form 4562* . . . . . . . . . . . . . . . . . . . . . . . . 2 Total of bonus depreciation amounts passed through to you as a partner
(line 5 of Schedule KPI) or as a shareholder (line 5 of Schedule KS) . . . . . . . . . . . . 3 Add steps 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Multiply step 3 by 80% (.80) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Total of the 80% federal bonus depreciation addition passed through
to you as a beneficiary (from line 6 of Schedule KF) . . . . . . . . . . . . . . . . . . . . . . . . . 6 Add steps 4 and 5. Enter here and on Schedule M1M, line 6 . . . . . . . . . . . . . . . . . * If bonus depreciation included in step 1 or 2 generated a loss in an activity that cannot be deducted in 2011 (e.g., a passive activity loss or a loss in excess of basis), you may reduce step 1 or 2 by
the amount of loss not allowed from the activity for 2011, up to the bonus depreciation claimed by
the activity. In a future year when the 2011 suspended loss is allowed, you must include the bonus
depreciation as an addition. The bonus depreciation is treated as the last suspended loss allowed.
Recalculate line 12 of your Minnesota Form 4562 using the same information from your
federal Form 4562 and the following modifications:
• Subtract $475,000 from line 1 of federal Form 4562, and enter the result on line 1 of your Minnesota Form 4562.
• Enter the amount from line 2 of federal Form 4562 on line 2 of the Minnesota Form 4562.
• Subtract $1,800,000 from line 3 of federal Form 4562, and enter the result on line 3 of your
Minnesota Form 4562.
• Enter the information from lines 6 and 7 of federal Form 4562 on lines 6 and 7 of your Minnesota Form 4562. However, if you have section 179 expensing from a flow through entity,
use the respective amounts from line 4 of Schedule KPI or line 4 of Schedule KS instead of
amounts from your federal Schedule K-1.
• Enter line 10 of federal Form 4562 on line 10 of your Minnesota Form 4562.
• Recalculate lines 4, 5, 8, 9, 11 and 12 of your Minnesota Form 4562. The result on line 12 of
Minnesota Form 4562 cannot be more than line 1 of that form.
Determine line 7 of Schedule M1M by completing the following steps:
1 Amount from line 12 from your federal Form 4562 . . . . . . . . . . . . . . . . . . . . . . . . 2 Line 12 of your Minnesota Form 4562 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Subtract step 2 from step 1(if zero or less, enter 0) . . . . . . . . . . . . . . . . . . . . . . . . . 4 Multiply step 3 by 80% (.80). Enter here and on Schedule M1M, line 7 . . . . . . . . M1M-2
If you completed federal Form 4562 to
claim the section 179 expensing for federal
tax purposes, you must complete lines 1
through 12 on a separate federal Form
4562, (referred to as Minnesota Form 4562
on the worksheet for line 7) to determine
the amount you need to add back for Minnesota purposes. See Worksheet for Line 7
on page M1M-2.
1 Bonus depreciation from 2001 through 2005, 2008, 2009 or 2010
that was not added back on your Form M1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 Total suspended loss from activity remaining after 2011 . . . . . . . . . . . . . . . . . . .
3 Subtract step 2 from step 1 (if a negative amount, enter zero) . . . . . . . . . . . . . . .
4 Multiply step 3 by 80% (.80) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 Total of the 80% bonus depreciation addition passed through
to you as a beneficiary (from line 4 of Schedule KF) . . . . . . . . . . . . . . . . . . . . . . .
6 Add steps 4 and 5. Enter here and on Schedule M1M, line 13 . . . . . . . . . . . . . . . Line 8
State Income Taxes Passed Through
to You as a Partner of a Partnership, a
Shareholder of an S Corporation or a
Beneficiary of a Trust
Include your pro rata share of income
taxes paid by the partnership, S corporation, estate or trust that were deducted in
arriving at the entity’s ordinary income
or net rental income. This amount, if any,
will be provided on the Schedule KPI, KS
or KF you received from the entity. Do
not include this amount on line 2 of Form
M1.
Line 10
Expenses Relating to Income Not
Taxed by Minnesota, Other Than From
U.S. Bond Obligations
If you deducted expenses on Schedule
A of Form 1040 that are attributable to
income not taxed by Minnesota (income
reported on lines 24 through 29 of Schedule M1M), you must add those expenses
to your taxable income. Enter amounts on
line 10.
Do not include expenses that are attributable to interest or mutual fund dividends
from U.S. bonds. For information on how
to report these expenses, see line 18 on
this page.
Line 12
Fines, Fees and Penalties Deducted
on Your Federal Return
You must add fines, fees and penalties
that were deducted as business expenses
paid to a government entity or nongovernment regulatory body as a result of a
violation of law, or the investigation of
any potential violation of law. Do not include amounts identified in a court order
or settlement agreement as restitution or
as an amount paid to come into compliance with the law.
Line 13
Suspended Loss From Bonus
Depreciation
If you are claiming a suspended loss from
2001 through 2005, 2008, 2009 or 2010 on
your federal return that was generated by
bonus depreciation, and you did not add
back 80 percent of the bonus depreciation
in those years, see Worksheet for Line 13
on this page.
Line 14
Capital Gain Portion of a Lump-Sum
Distribution From a Qualified Retirement Plan
If you received a qualifying lump-sum
distribution in 2011 and you chose the
capital gain election on federal Form
4972, enter the capital gain from line 6 of
federal Form 4972. You must include a
copy of federal Form 4972 when you file
your return.
Line 15
Net Operating Loss (NOL) Carryover
Adjustment
The Minnesota Legislature did not adopt
the provisions of the Worker, Homeownership, and Business Assistance Act of
2009 (WHBA). Under this Act, taxpayers
are allowed to carryback 3, 4, or 5 years
an NOL generated in 2008 or 2009. For
federal purposes, any remaining NOL
that was not fully absorbed in the carryback years can be carried forward for
up to 20 years, beginning in 2010. If you
claimed the deduction in 2011, you must
add back the federal NOL amount as a
positive number on line 15.
M1M-3
Line Instructions
Subtractions
The amounts entered on lines 18 through
37 will be subtracted from your taxable
income.
Line 18
Net Interest From U.S. Bonds
Interest earned on certain federal obligations is federally taxable, but exempt from
Minnesota tax.
Include federally taxable interest you
received from U.S. bonds, bills, notes,
savings bonds and certificates of indebtedness, and Sallie Mae bonds, as well
as any dividends paid to you by mutual
funds that are attributable to such bonds,
reduced by any related investment interest and other expenses deducted on your
federal return relating to this income.
Also include any net U.S. Government
interest and dividends you received as a
partner of a partnership, a shareholder
of an S corporation or a beneficiary of a
trust.
Do not include interest or dividends attributable to Ginnie Mae, Fannie Mae or
Freddie Mac bonds.
If you received interest from a government source not listed, see Income Tax
Fact Sheet #13, U.S. Government Interest,
or contact the department.
Continued
Line 19
K-12 Education Expense Subtraction
If in 2011 you purchased educational
material or services for your qualifying child’s K–12 education, you may be
able to subtract qualified expenses from
your taxable income, regardless of your
income.
If your household income is less than the
limits for the K–12 education credit (see
instructions for Form M1 line 27 on page
16 of the M1 instruction booklet), first
complete Schedule M1ED, K–12 Education Credit, to claim the credit for your
qualifying education expenses. Qualifying
expenses not used for the credit and any
tuition expenses that do not qualify for
the credit may be used for the subtraction. You cannot claim both a credit and a
subtraction on the same expenses.
To subtract your education expenses, the
child must:
• be your child, adopted child, stepchild,
grandchild or foster child who lived
with you in the United States for more
than half of the year;
• have been in grades K–12 during 2011;
and
• have attended a public, private or home
school in Minnesota, Iowa, North Dakota, South Dakota or Wisconsin.
In addition to the above requirements,
you must have purchased educational
services or required materials during the
year to help your child’s K–12 education.
The types of education expenses that
qualify for the credit also qualify for the
subtraction. However, certain expenses
qualify only for the subtraction. For examples of qualifying education expenses,
see page 13 of the M1 instruction booklet.
Subtraction Limits
The maximum subtraction allowed for
purchases of personal computer hardware
and educational software is $200 per family. You may split qualifying computer expenses, up to $200, among your children
any way you choose.
The maximum amount of education expenses you may subtract is $1,625 for each
child in grades K through 6, and $2,500
for each child in grades 7 through 12.
If you qualify for the K–12 education credit (Form M1, line 27), and you cannot use all of your
education expenses on Schedule M1ED, determine line 19 of Schedule M1M by completing the
following steps:
1 Qualifying tuition expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Qualifying computer expenses in excess of $200, up to a maximum of $200 . . . Complete steps 3–6 if on Schedule M1ED line 17 is less than line 16.
3 Line 15 of Schedule M1ED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Line 18 of Schedule M1ED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Multiply step 4 by 1.333 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Subtract step 5 from step 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Add steps 1, 2 and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Enter the result from step 7—up to the maximum subtraction amount per child—on Schedule
M1M, line 19.
If you qualify for the K–12 education
credit (Form M1, line 27), and you cannot use all of your education expenses
on Schedule M1ED, complete Worksheet
for Line 19 on this page to determine the
amount you can subtract.
See Income Tax Fact Sheet #8, K–12 Education Subtraction and Credit, for more
information.
Enter your qualifying education expenses
on line 19. Also enter each child’s name
and grade at the time the expenses were
paid.
Line 20
Charitable Contributions over $500
If you did not itemize deductions and
you took the standard deduction on your
federal return, you may be able subtract
50 percent of your total contributions for
the year over $500. To determine your
allowable contributions, you will need
the instructions for federal Schedule A of
Form 1040.
Complete the following steps to determine line 20 of Schedule M1M.
1 Determine your total allowable
charitable contributions you would
have been able to enter on lines 16
and 17 of federal Schedule A . 2 The first $500 of contributions
do not qualify . . . . . . . . . . . . . . . $500
3 Subtract step 2 from step 1 . . . 4 Multiply step 3 by 50% (.50).
Enter here and on line 20 . . . . Line 21
Federal Bonus Depreciation Subtraction
You may be eligible to reduce your taxable
income if you:
• reported 80 percent of the federal bonus
depreciation as an addition to income
on your 2006 through 2010 Form M1,
or
• received a federal bonus depreciation
subtraction in 2011 from an estate or
trust.
To determine the amount, see Worksheet
for Line 21 on page M1M-5.
Line 22
Section 179 Expensing Subtraction
If you had an addition for increased section 179 expensing on your 2006 through
2010 Schedule M1M, you may subtract 20
percent of the total on your 2011 return.
Line 23
Subtraction for Persons 65 or Older
or Permanently and Totally Disabled
(Schedule M1R)
You can reduce your taxable income if you
(or your spouse, if filing a joint return) are:
• age 65 or older by the end of 2011, or
• permanently and totally disabled and
received federally taxable disability
income in 2011. If you did not receive
federally taxable disability income, you
don’t qualify for this subtraction.
If you (or your spouse, if filing a joint
return) meet the age or disability requirement, check the chart on page 12 of the
M1 instructions to determine if you meet
the income requirements.
If you meet all of the eligibility requirements, complete and include Schedule
M1R, Age 65 or Older/Disabled Subtraction.
M1M-4
Continued
Line 24
Railroad Retirement Board Benefits
If you received unemployment, sick pay or
retirement benefits from the Railroad Retirement Board in 2011, you can subtract
these amounts from your federal taxable
income.
Line 25
Reciprocity Income
Minnesota has income tax reciprocity
agreements with Michigan and North
Dakota. Reciprocity applies only to
personal service income, which includes
wages, salaries, tips, commissions, fees
and bonuses. For additional information,
see page 5 of the M1 instructions.
When to complete Schedule M1M: If
you are a resident of a reciprocity state
and your only Minnesota source income
is wages covered under reciprocity from
which Minnesota income tax was withheld, use Schedule M1M to get a refund
of the amount withheld. Place an X in
the box to indicate the state of which you
were a resident during the year, and enter
the amount from line 1 of Form M1 on
line 25 of this schedule.
When you file Form M1, follow the steps
on page 5 of the M1 instructions. You
must also complete and include Schedule
M1W, Form MWR and a copy of your
home state tax return.
To avoid having Minnesota tax withheld
in the future on wages covered by reciprocity, file Form MWR each year with
your employer.
When to complete Schedule M1NR: If
your gross income assignable to Minnesota (other than from the performance of
personal services covered under reciprocity) is $9,500 or more, you are subject to
Minnesota tax on that income. File Form
M1 and Schedule M1NR. You are not
eligible to take the reciprocity subtraction
on Schedule M1M. Do not include your
personal service income on column B of
Schedule M1NR.
Line 26
American Indians Living on an
Indian Reservation
If you are a member of an American
Indian tribe living and working on the
reservation of which you are an enrolled
member, enter your reservation source
income on line 26, to the extent the income is federally taxable.
If you claimed bonus depreciation as an addition on your 2006 Form M1:
1 Line 6 of your 2006 Schedule M1M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 Net operating loss generated for tax year 2006 (line 25, Schedule A of
2006 federal Form 1045). Enter as a positive number . . . . . . . . . . . . . . . 2
3 Subtract step 2 from step 1 (if zero or less, enter 0) . . . . . . . . . . . . . . . . . 3
4 Multiply step 3 by 20% (.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2007 federal Form 1045). Enter as a positive number . . . . . . . . . . . . . . . 6
7 Subtract step 6 from step 5 (if zero or less, enter 0) . . . . . . . . . . . . . . . . . 7
8 Multiply step 7 by 20% (.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2008 federal Form 1045). Enter as a positive number . . . . . . . . . . . . . . 10
11 Subtract step 10 from step 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12 Multiply step 11 by 20% (.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13 Line 3 of your 2009 Schedule M1M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
15 Subtract step 14 from step 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16 Multiply step 15 by 20% (.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
17 Line 3 of your 2010 Schedule M1M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
19 Subtract step 18 from step 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
20 Multiply step 19 by 20% (.20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
If you received a subtraction in 2011 from an estate or trust:
21 Total of any bonus depreciation subtraction amounts you received
as a beneficiary of an estate or trust (from line 12 of Schedule KF) . . 21
Total subtraction
22 Add steps 4, 8, 12, 16, 20 and 21.
Enter here and on line 21 of Schedule M1M . . . . . . . . . . . . . . . . . . . . . . . 22
If you are eligible to subtract reservation
source income, you must apportion any
working family or child care credit you
claim based on your income taxable to
Minnesota.
Line 27
Federal Active Duty Military Pay
Received by Residents
If you are a Minnesota resident who is a
member of the United States or United
Nations armed forces, enter the military
pay you received for federal active duty, to
the extent the income is federally taxable.
Include any National Guard and Reservist members who have been called up to
federal active duty.
Line 28
National Guard Members, Reservists
Members of the Minnesota National
Guard and Reserves are allowed a subM1M-5
traction, to the extent the income is federally taxable, for pay received for training
and certain types of qualifying active
service within Minnesota.
• Training includes annual training and
drill weekends.
• State active service includes natural disaster emergency response and missing
person searches.
• Federally funded state active service includes airport security duty and active
duty for special work (ADSW).
If you received pay for federal active duty,
report this amount on line 27 instead of
line 28.
Do not include pay for service performed
under the Active Guard Reserve (AGR)
program.
Continued
Line 30
Organ Donor
If, while living, you, your spouse (if filing
a joint return), or a dependent donated a
human organ to another person, you may
be able to subtract your qualified expenses. An organ may include all or part of a
liver, pancreas, kidney, intestine, lung or
bone marrow.
Qualified expenses are your unreimbursed
expenses for travel and lodging and for
any lost wages net of sick pay due to the
transplantation. The maximum amount
you may subtract is your actual qualified
expenses or $10,000, whichever is less.
Line 31
Income Taxes Paid to a Subnational
Level of a Foreign Country
If you paid taxes to a subnational level of
a foreign country other than Canada, you
may be able to subtract the amount you
did not use to claim a federal foreign tax
credit. A subnational level is the equivalent of a state of the United States. See
Worksheet for Line 31 on this page.
Line 32
JOBZ Subtractions
Individuals who invest in or operate a
qualified business in a Job Opportunity
Building Zone (JOBZ) may be able to
subtract certain types of income, to the
extent that the income would otherwise
be taxable.
Complete and include Schedule JOBZ,
JOBZ Tax Benefits, if in 2011 you received:
• income from operating a qualified business in a zone;
• income for renting real or tangible
personal property used by a qualified
business located in a zone;
• gains from the sale or exchange of real
or tangible personal property used by a
qualified business located in a zone; or
• gains from the sale of an ownership
interest in a qualified business.
If you received JOBZ income as a partner,
shareholder or beneficiary, these amounts
are shown on the Schedule KPI, KS or KF
you received from the entity. There is no
need for you to complete Schedule JOBZ.
Line 33
Gain From the Sale of Farm Property
You can reduce your taxable income if
you received a gain from the sale of farm
property in 2011 and:
• you owned and operated the farm;
1 Foreign taxes paid from federal Form 1116, line 9 . . . . . . . . . . . . . . . . . . . 2 Federal foreign tax credit from Form 1116, line 22, for the
subnational level of a foreign country other than Canada . . . . . . . . . . . . 3 Subtract step 2 from step 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Tax paid to a subnational level of a foreign country, other than
Canada, on income you received while a Minnesota resident . . . . . . . . . 5 Step 3 or step 4, whichever is less.
Also enter this amount on Schedule M1M, line 31 . . . . . . . . . . . . . . . . . . Worksheet for Line 33
1 Amount of your debts immediately before the sale . . . . . . . . . . . . . . . . . . 2 Amount of debt forgiveness that you were permitted to exclude
from your income when you completed your Form 1040 . . . . . . . . . . . . . 3 Subtract step 2 from step 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Fair market value of your assets immediately before the sale . . . . . . . . . . 5 Subtract step 4 from step 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Gain from the sale included on line 37 of Form 1040 . . . . . . . . . . . . . . . . 7 Step 5 or step 6, whichever is less.
Also enter this amount on Schedule M1M, line 33 . . . . . . . . . . . . . . . . . . • your debts were greater than the fair
market value of your assets immediately before the sale;
• you included the gain from the sale in
your federal adjusted gross income on
line 37 of federal Form 1040; and
• you applied the proceeds from the sale
of the property to paying off the mortgage, contract for deed, or lien on the
property.
See Worksheet for Line 33 on this page.
Line 34
Post Service Education Awards Received for Service in an AmeriCorps
National Service Program
If you received a post service education
award, such as tuition reimbursements or
student loan payments, from the federal
government in 2011 for service in the
AmeriCorps program, you can subtract
the amount you included in your federal
taxable income. On line 34, fill in the
amount you received after leaving the
program.
Do not include the stipend received while
working in the program.
If your education award was used to pay
for a student loan, and you deducted the
student loan interest on line 33 of Form
M1M-6
1040 or line 18 of Form 1040A, you must
reduce your subtraction by the interest
attributable to the award.
Line 35
Net Operating Loss (NOL) from 2008
or 2009
Minnesota did not adopt the provisions
of the Worker, Homeownership, and
Business Assistance Act of 2009 (WHBA).
If you chose this federal option, you are
limited on your Minnesota return to a
carryback period of two years preceding
the loss.
On line 35, enter the amount you are
carrying forward for 2011 for Minnesota
purposes.
For complete information on how to determine line 35 and any amount to carry
forward, go to our website at
www.revenue.state.mn.us.
Line 36
Subtraction for Prior Addback of Reacquisition of Indebtedness Income
If you included in this year’s federal
taxable income any discharge of indebtedness income from reacquisition
of business debt which you elected to
defer federally in a prior year, enter that
amount on line 36.
58TH ANNUAL MNCPA
TAX CONFERENCE
November 15-16, 2012 Minneapolis Convention Center, Minneapolis, MN
Please rate the following using the scale below:
5=Excellent, 4=Very Good, 3=Average, 2=Fair, 1=Poor
F1. Understanding the Non-Resident Income Tax Filing Requirements of North Dakota
and Wisconsin
Excellent
Relevancy of Topic
Stated Objectives Met
Overall Satisfaction
Poor
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Brittany Dunn, CPA
Knowledge of Subject
Presentation Skills
Quality of Materials
Engagement of Participants
Lauri A. Roberts, CPA
Knowledge of Subject
Presentation Skills
Quality of Materials
Engagement of Participants
Do you have any additional feedback regarding the instructors and/or materials? If so, please share it with us.
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
What would you like to learn at the 2013 conference?
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
Who would you like to hear speak at the 2013 conference?
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
Thank you for your feedback and suggestions. We appreciate your input.
Minnesota Society of Certified Public Accountants
www.mncpa.org 952-831-2707

Session F1. Understanding the Non-Resident Income

Transcription

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