Minnesota Rebate checks

 Just a heads up about those rebate checks Minnesota taxpayers received this fall. If you were a single taxpayer and had adjusted gross income up to $75,000 in 2021 you’d get $260 and $520 for married filers who earned up to $150,000. Families could get an additional rebate check for up to three dependents, for a maximum of $1,300. The IRS recently determined the checks will be considered federally taxable income. The federal tax on the checks could cost between $26 and $286, depending on a household’s income and how much was received in rebates. According to The Department of Revenue, the state will now send a form to all rebate recipients to use when filing their federal individual income tax returns next year. If they include this payment in their federal adjusted gross income, they should subtract it from their Minnesota taxable income on line 33 of Schedule M1M on their Minnesota return. Minnesota IS NOT taxing this rebate, just the Federal Government. Keep in mind not everyone has to file taxes if they’re under a certain income, so the department estimates 18% of rebate recipients don’t have a federal tax liability. This rebate was tied to Covid Relief and the federal government ended the COVID health emergency May 11. Legislation authorizing the rebate checks was signed May 24, so there is push back that the IRS is taxing this on a Federal level. If you have questions call 855-226-6639 or ask your tax person.