Non Resident MN Individual Tax

[dkma5019]

Taxpayer is non resident of MN with losses from MN partnerships.

For 2019, taxpayer had NOL and carried it back on federal return.  Can you only carry forward for MN?

The federal NOL is $4.2m but the calculation for excess business loss on the '19 MN return was $4.7m.  Which amount do you use for the NOL? $4.2 or $4.7m?

On the MN return for '20, the NOL is subtracted on Sch M1NC which flows to line 14, Sch M1NR.  If your MN losses are different then the federal, would you put the MN loss in column B?

NOL deduction is limited to 80% of income before NOL deduction?  Does the balance of NOL not used carry forward?

Taxpayer also has bonus depreciation from prior years that have not been added back due because no losses have been taken.

Taxpayer has $5m in MN loss to date.  $2m are from bonus depreciation.  In '20, taxpayer had income and was allowed to deduct $1m in losses.

Do you have to add back the $1m in losses or do you wait until all your losses have been used?

[PKCPAMST]

Starting with taxable years beginning after December 31, 2018, MN uses federal AGI, with some modifications, as the starting point. While MN follows the federal rules for NOLs, it  does not recognize the CARES Act provisions with respect to NOLs.

Taxpayers amending their federal return to carry back a NOL – either on Form 1040X or Form 1045 – need to use MN Form M1X to amend their MN return. For your client who is a nonresident of MN, you will need to recompute Schedule M1NR with Form M1X for the loss year.

For more info, please copy and paste the following link in your browser:

https://www.revenue.state.mn.us/net-operating-losses-0