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Minnesota retroactive tax law change

SOLVEDby IntuitProConnect Tax6Updated September 13, 2021

Minnesota enacted tax law changes on July 1st, 2021 to conform to federal treatment of unemployment income and Paycheck Protection Program (PPP) loan forgiveness. Due to these changes, the state released updated forms and instructions for preparing 2020 returns.

When will the new forms be available?

Updates are now available for Lacerte, ProConnect, and ProSeries.

To apply the law changes in Lacerte:

  1. Click on the Tools menu at the top of your screen, and select Updates.
  2. Once updates are complete, open your client’s return. 
  3. Go to the appropriate screen for your tax type:
    • Individual: MN Modifications, screen 51.221
    • Partnership: MN Schedule K, screen 38.221
    • S-corporate: MN Modifications to Shareholders, screen 45.221
    • Corporate: MN Adjustments, screen 47.221
  4. Check the box to Apply provisions for Minnesota partial conformity.

To apply the law changes in ProConnect:

  1. Go to the Input Return tab.
  2. On the left-side menu, select State & Local.
  3. Navigate to the appropriate screen for your tax type:
    • Individual: MN Modifications
    • Partnership: Schedule K > MN Schedule K
    • S-corporate: Schedule K > MN Modifications to Shareholders
    • Corporate: Adjustments > MN Adjustments
  4. Check the box to Apply provisions for Minnesota partial conformity.

To apply the law changes in ProSeries:

The new forms will generate automatically once you update your program.

If you are using ProSeries Professional, we recommend locking impacted returns before you open them. This will prevent ProSeries from making the automatic adjustment until further guidance is received from the IRS. See How to Lock a return in ProSeries for details.

If you e-filed and are using ProSeries Basic, or don't wish to lock the return, ProSeries will keep a record of the original amounts on the Originally E-Filed 1040 Amounts worksheet. When you open a return that has changed, you'll see a message saying, "ProSeries has detected that the amounts calculated in this return have changed since the return was e-filed. Please review the changes to determine if an amended return needs to be filed." Select Display Changes to see the original amounts.

What about clients who already filed?

The Minnesota Department of Revenue will adjust returns automatically, when possible. Don’t amend your client’s return unless they receive a notice from the state that their return couldn’t be adjusted. Learn more >

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