State advice to Minnesotans: If you haven't already, don't file tax returns until next week
ST. PAUL -- Minnesotans who have not filed their state income tax returns should wait until next week, state officials said Friday. State Revenue Commissioner Myron Frans said that will give tax officials time to provide more specific advice abou...
ST. PAUL -- Minnesotans who have not filed their state income tax returns should wait until next week, state officials said Friday.
State Revenue Commissioner Myron Frans said that will give tax officials time to provide more specific advice about how a tax-cut bill legislators approved Friday will affect taxpayers. He said Minnesotans who already have filed returns, about half of taxpayers, will be notified if their taxes fall because of the newly minted law.
"If you have not filed your tax return yet, I would advise you to wait until Monday," he said.
People who have yet to file may want to learn what tax breaks could affect them, Frans said, but warned: "Regardless of the little delay, they have to meet the April 15 deadline."
He said some returns can be modified by the department with no further action by taxpayers. In other situations, Frans' department will notify taxpayers who need to file an amended return to take advantage of the tax breaks.
Frans plans to announce more specifics Monday, but on Friday said that taxpayers especially may want to delay filing returns if they may have deductions or credits related to mortgage insurance and education. Up to 16,000 more families who earn up to $45,000 a year also may qualify for an expanded Working Family Credit.
During the weekend, Frans' department will make adjustments to account for the changes. The Revenue Department also will work with tax preparers and tax software companies to help them make needed changes that they hope will be incorporated by April 1.
The scramble is needed because Minnesota legislators approved $443 million of tax cuts Friday, 10 months after they raised taxes more than $2 billion and less than a month before the tax deadline. Many of the tax breaks, which could affect up to 500,000 Minnesotans, can lower taxes on returns now being filed.
Senators approved the bill 58-5, with the House following 126-2.
Sen. Patricia Torres Ray, D-Minneapolis, said she voted against the bill because she favors more education spending instead of the tax cuts.
The votes came a day after Republican senators delayed debate on the bill, saying they received the bill only an hour before debate was to begin.
Even before the Thursday delay, senators waited two weeks after the House passed its tax bill.
“We took a little bit of time to look at the ramifications so we could make some improvements,” Senate Tax Chairman Rod Skoe, D-Clearbrook, said. “And we did.”
More cuts may be coming. "We are not done yet," Skoe said, adding that he expects a second tax bill.
Skoe argued against deeper tax cuts now, and in favor of putting more in the state budget reserve, because the last time the state was in good financial condition then-Gov. Jesse Ventura led the charge to send tax rebate checks to Minnesotans. Soon after that, Skoe said, the state began running into financial problems.
The chairman's provision adds $150 million to the state budget reserve, which Senate Majority Leader Tom Bakk, D-Cook, said is important. He said it "assures fiscal stability for the state going forward."
The tax bill rewrites some state tax laws to conform to federal law, which would lower thousands of Minnesotans’ income taxes. That will save taxpayers more than $200 million.
Saving businesses more than $200 million are the canceling of business sales taxes approved last year as well as a warehousing tax that was to take effect April 1. The sales taxes included those placed on farm equipment and other commercial repair work and on some on technology sales.
"I call it a good start," said Rep. Paul Anderson, R-Starbuck, who like many Republicans wanted more taxes lowered.
Republicans frequently reminded Democrats that they increased taxes more than $2 billion last year, but only want to cut taxes $443 million this year (a figure that grew slightly Friday as last-minute changes were made to the bill).
"It is not often that we get a second chance to recover once we have jumped off the ledge," Sen. Paul Gazelka, R-Brainerd, said, adding that many mistakes were made last year when business taxes were increased.