Governor Mark Dayton signed the omnibus tax bill on May 30, 2017. There were many additions and changes that will affect taxpayers for 2017 and beyond. Below is a brief summary of some of the major changes that could impact your 2017 tax filing.
2017 Individual Tax Subtraction and Credits
- Refundable credit for tax paid for personal and professional services performed in Wisconsin at a higher rate than if their earnings were all in Minnesota.
- First Time Homebuyer Savings Account subtraction.
- Credit or subtraction for contribution to a Section 529 College Savings Plan. The credit has a phase-out limit. The subtraction does not have a phase-out limit. Contributions to any state Section 529 College Savings Plan qualifies for the credit or subtraction.
- Social Security Benefit Subtraction that will be phased-out based on your income level.
- Student loan credit for postsecondary education loans may qualify for a nonrefundable credit up to $500.
2018 Tax Credit
- Beginning Farmer Incentive credit may be available to owners of agricultural assets who sell or rent to beginning Minnesota farmers. Unused credit may be carried over for 15 years.
- Beginning farmers may qualify for a credit by participating in a financial management program approved by the Rural Finance Authority. Unused credit may be carried over for 3 years.
- The estate tax exemption has been increased from $1.8 million to $2.1 million for 2017.
Increases for future years are:
- 2018 – $2.4 million
- 2019 – $2.7 million
- 2020 and thereafter – $3.0 million