Fillable 2020 Schedule M1NC, Federal Adjustments (Minnesota Department of Revenue)

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2020 Schedule M1NC, Federal Adjustments (Minnesota Department of Revenue)

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2020 Schedule M1NC, Federal Adjustments
Minnesota has not adopted the federal law changes enacted aer December 31, 2018, that aect federal adjusted gross income for tax year 2020.
This schedule allows for any necessary adjustments required to le a state tax return.
Read the instrucons before you complete this schedule.
Adjustments to federal adjusted gross income (FAGI)
1 Home mortgage debt cancelled in 2020 and excluded from federal income ............................... 1
2 Tuionandfeesdeduconfromline21offederalSchedule1........................................... 2
3 Distribuonsfromhighereducaonsavingsaccountsusedforapprenceshipprogramsorstudentloanpayments. 3
4 IRAdistribuonsrelatedtoCoronavirustoberepaidoverextendedme ................................. 4
5 Certainrerementaccountwithdrawalsexcludedfromincome ......................................... 5
6 Charitablecontribuondeduconforlerswhoclaimthefederalstandarddeducon ...................... 6
7 Thislineintenonallyleblank.................................................................... 7
8 Thislineintenonallyleblank.................................................................... 8
9 PaycheckProteconProgramloanforgiveness ...................................................... 9
10 Exclusionforcertainemployerpaymentsofstudentloans............................................. 10
11 EmployeeRetenonCreditundertheCARESAct .................................................... 11
12 EmployeeRetenonCreditforemployersaectedbyqualieddisasters................................. 12
13 NOLcarryoversandsuspensionof80%Limit........................................................ 13
14 Modicaonofexcesslosslimitaonorexcessbusinessloss ......................................... 14
15 SubpartFIncomeAdjustment .................................................................... 15
16 Modicaonofbusinessinterestlimitaon ........................................................ 16
17 QualiedImprovementPropertytechnicalx ...................................................... 17
18 EmployercreditforpaidmedicalleaveandEmployerpayrollcreditforrequiredpaidfamilyleave........... 18
19 TCDTRbasisanddepreciaonprovisions........................................................... 19
20 Creditprovisionsimpacngbasisanddepreciaon .................................................. 20
21 Creditprovisionsimpacngbusinessexpenses..................................................... 21
22 Otheradjustmentstofederaladjustedgrossincome ................................................ 22
23 TCDTR20basisanddepreciaonprovisions ......................................................... 23
Enter amounts as a posive or negave.
Round amounts to the nearest whole dollar.
YourFirstNameandInial LastName SocialSecurityNumber
9995
*201341*
24 Loans,grants,andloanrepaymentassistanceundertheCARESActexcludedfromincome(seeinstrucons) .. 24
25 TemporaryAllowanceofFullDeduconforBusinessMeals(seeinstrucons) ............................ 25
26 Thislineintenonallyleblank................................................................... 26
27 Thislineintenonallyleblank...................................................................27
28 Thislineintenonallyleblank .................................................................. 28
29 Thislineintenonallyleblank.................................................................. 29
30 Thislineintenonallyleblank.................................................................. 30
31 Ifyouhaveanamountonlines1through30,andanadjustmenttoincomesubjecttoaruleinvolving
adjustedgrossincomesuchasanIRAdeducon,SocialSecurityincome,
rentalrealestateloss,orstudentloaninterest,seeinstrucons .........................................31
32 Addlines1-31.Iftheresultisposive,enteritonFormM1M,line16.
Iftheamountisnegave,enteritasaposivenumberonFormM1M,line45 ............................32
33 Line1ofFormM1.............................................................................. 33
34 Minnesota adjusted gross income. Addlines32and33,then see instrucons ........................... 34
You must include this schedule when you le Form M1.
*201411*
9995
2020 Schedule M1NC, page 2
Purpose of This Schedule
Rules used to determine Minnesota Individual Income Tax are based on the Internal Revenue Code (IRC) as amended through December 31,
2018.
Since that date, federal tax laws were enacted containing provisions aecting tax year 2020. These federal laws include the Taxpayer Certainty
and Disaster Tax Relief (TCDTR) Act of 2019, the Families First Coronavirus Response (FFCR) Act, the Coronavirus Aid, Relief, and
Economic Security (CARES) Act, the Setting Every Community Up for Retirement Enhancement (SECURE) Act, the Taxpayer Certainty and
Disaster Tax Relief Act (TCDTR20) of 2020, and the COVID-Related Tax Relief (COVIDTR) Act. Because Minnesota has not adopted these
federal changes, you may need to adjust your Minnesota return.
You must use this Schedule to complete your Minnesota return if you are aected by any of its provisions. Several provisions may require an
income adjustment for Minnesota tax purposes. This Schedule includes the most common adjustments; you must make adjustments as needed
for all provisions included in the TCDTR Act, FFCR Act, CARES Act, and the SECURE Act, TCDTR Act of 2020, and the COVIDTR Act.
Save your entire 2020 Minnesota income tax return and all worksheets you use.
Who Must File Schedule M1NC
If you are aected by any of the provisions included on this form, complete Schedule M1NC to make the necessary adjustments when you le
Form M1. Refer to the line instructions below for more information about the adjustments for your Minnesota return.
Line Instrucons
Line 1 — Home mortgage debt cancelled in 2020 and excluded from federal income (TCDTR Act Sec. 101 and
TCDTR Sec. 114)
If you led federal Form 982 and checked the box on line 1e, enter the amount of discharged qualied principal residence indebtedness
included on line 2 of Form 982.
Line 3 — Distribuons from higher educaon savings accounts used for apprenceship programs or student
loan payments (SECURE Act Sec. 302)
If you received a distribution from a 529 savings plan for the following items, include the amount of earnings that were part of the distribution
on line 3.
• Fees, books, supplies, and equipment required for participation in an apprenticeship program
• Pay for education loans of the designated beneciary or their sibling
If you claimed the Minnesota section 529 plan credit or subtraction on a prior year return, you may be required to repay some of the benet
you received. Complete Schedule M1529, Education Savings Account Contribution Credit or Subtraction, to calculate any recapture tax you
be required to pay.
Line 4 — IRA distribuons related to Coronavirus allowed to be repaid over extended me (CARES Act Sec.
2202)
Enter the dierence between what you included in your federal income and what would have been included if you had not used the IRA rules
under CARES Act Sec. 2202 related to these distributions. Enter as a positive amount.
Line 5 — Certain rerement account withdrawals excluded from income (TCDTR Act Sec. 202)
Complete line 5 if all of the following applied in 2020:
• Your principal abode was in a qualied disaster area
• You received a withdrawal from your retirement account
• You were able to exclude an amount of that withdrawal from your income because you lived in a qualied disaster area
Enter the dierence between what you included in your federal income and what would have been if you had not lived in the qualied disaster
area.
Line 6 — Charitable contribuon deducon for lers who claim the federal standard deducon (CARES Act
Sec. 2204)
If you had an “above the line” charitable contribution deduction and did not itemize deductions, enter the amount from line 10b on federal
Form 1040.
Line 9 — Paycheck Protecon Program loan forgiveness (CARES Act Sec. 1106 and COVIDTR Act Sec. 276)
If you excluded loan forgiveness from your income under the Paycheck Protection Program on your federal return, include the amount of the
forgiven loan on line 9.
2020 Schedule M1NC Instrucons
For taxpayers who are aected by changes to federal tax law passed aer December 31, 2018
1
Line 10 — Exclusion for certain employer payments of student loans (CARES Act Sec. 2206)
If you or your lender received a contribution by your employer for principal or interest on any qualied education loan, and the payment
was excluded from your federal gross income pursuant to an “Educational-Assistance Program,” include the amount contributed by your
employer on line 10.
Line 11 — Employee Retenon Credit under the CARES Act (CARES Act Sec. 2301 and TCDTR20 Sec. 207)
If you claimed the federal credit and as a result claimed less wages as a business expense deduction, include the disallowed wages as a
negative number.
Line 12 — Employee Retenon Credit for employers aected by qualied disasters (TCDTR Act Sec. 203 and
TCDTR20 Sec. 303)
If you claimed the federal credit, include the disallowed wages as a negative number.
Line 13 — NOL carryovers and suspension of 80% Limit
Carryovers from prior years
If you are carrying over a net operating loss from 2019, you must complete 2019 Schedule M1NC line 7 before determining your allowable
carryover NOL amount for tax year 2020.
Your Minnesota net operating loss deduction for 2020 is the sum of any unused NOLs from tax years beginning before 2018 plus the lesser
of:
• The NOL from a tax year beginning after 2017; which includes any part of an NOL attributable to an excess business loss;
• or 80% of taxable income for the carryover year determined before any NOL deduction.
On line 13, include any NOL deduction claimed on your federal return from tax years beginning after 2017 that exceeds the 80% limitation
on taxable income. Include as a positive amount.
Net operang loss carryover to tax year 2021
1 Enter the current year NOL as a negative. Do not include amounts federally carried back to 2020 from 2021
that are not losses from a farming business that you added back to income on line 13 of this form ..........
2 Enter the amount from step 1 that was federally carried back to 2018 or 2019 as a positive number..........
3 Enter the amount from step 13 of the worksheet for excess business losses. Enter as a negative number ......
4 Combine steps 1 through 3. This is your NOL carryover to 2021 .....................................
Net operang loss carryback from 2021
If you are carrying back a net operating loss from 2021 (and it is not a farming loss eligible to be carried back under the IRC as amended
through December 31, 2018), enter the full amount of the carryback you claimed from your federal return on line 13.
If you are carrying back a net operating loss from 2021 that is a farming loss, your state NOL deduction is limited to 80% of taxable income.
If you carried a farm loss back to 2019, you must use the 2019 Minnesota instructions to determine your allowable NOL that is carried over
into 2020. Include the amount of your net operating loss deduction from a farm activity that exceeds 80% of taxable income on line 13 as a
positive amount.
Line 14 — Modicaon of excess business loss (CARES Act Sec. 2304)
Your losses in 2020 may be subject to the excess business loss limits under the Internal Revenue Code.
You must add to income any amount of a net operating loss exceeding the excess business loss limitations in the Worksheet for Excess
Business Losses.
Trade or business
An activity qualies as a trade or business if your primary purpose for engaging in the activity is for income or prot and you are involved
in the activity with continuity and regularity. The facts and circumstances of each case determine if an activity is a trade or business. The
regularity of activities and transactions and the production of income are important elements. You do not need to actually make a prot to
be in a trade or business as long as you have a prot motive. However, you do need to make ongoing eorts to further the interests of your
business.
2
3
Line 15 – Subpart F Income Adjustment (TCDTR Act Sec. 145 and TCDTR20 Sec. 111)
Filers who had income subject to the extension of the look-through rule for related controlled foreign corporations under IRC 954(c)(6)
should make an adjustment reversing the impacts of this provision and enter the amount as a positive number.
Line 16 — Modicaon of business interest limitaon (CARES Act Sec. 2306)
The amount of the business interest limitation that can be deducted for Minnesota is 30%.
Include the following amounts reported on Schedules KFNC, KSNC, and KPINC on line 16:
• Line 5 of Schedule KFNC
• Line 5 of Schedule KSNC
• Line 5 of Schedule KPINC
Line 17 — Qualied Improvement Property technical x (CARES Act Sec. 2307)
If you claimed federal bonus depreciation on this type of property, determine the dierence between the federal bonus depreciation you
claimed on this property, and the cost recovery deduction or expensing method you would have been able to claim prior to the CARES Act.
Include the result as a positive number.
Do not include the bonus depreciation claimed for this property on your federal Form 4562 when you complete Step 1 of the Worksheet for
Line 3 - Bonus Depreciation Modication.
If you claimed bonus depreciation on this property on your 2019 return and made an adjustment on your 2019 Schedule M1NC to add back
the amount not allowed for Minnesota purposes, you may calculate the depreciation you would have been able to claim prior to the CARES
Act for 2020 on line 17. Include this amount as a negative number.
Worksheet for Excess Business Losses
1 Enter amount from Form 1040 or 1040-SR, line 1................................................
2 Enter amount from Schedule 1 (Form 1040 or 1040-SR), line 3 .....................................
3 Enter amount from Form 1040 or 1040-SR, line 7................................................
4 Enter amount from Schedule 1 (Form 1040 or 1040-SR), line 4 .....................................
5 Enter amount from Schedule 1 (Form 1040 or 1040-SR), line 5 .....................................
6 Enter amount from Schedule 1 (Form 1040 or 1040-SR), line 6 .....................................
7 Enter amount from Schedule 1 (Form 1040 or 1040-SR), line 7 .....................................
8 Enter other income, gain, or losses from a trade or business not reported on steps 1 through 7 .............
9 Combine steps 1 through 8 ..................................................................
10 Net amount of nonbusiness income and losses. Include amounts from line 4 of Schedule KSNC, line 4 of
Schedule KFNC, and line 4 of Schedule KPINC. If the total is less than zero, enter as a negative number ....
11 If step 10 is a negative number, enter it here as a positive number. If step 10 is a positive number,
enter it here as a negative number ............................................................
12 Add steps 9 and 11 ........................................................................
13 Enter $259,000 (or $518,000 if married ling jointly) .............................................
14 Add steps 12 and 13. If the result is negative, you have an excess business loss. (See instructions) .........
Step instrucons
Step 1 - Enter any wages, salaries, and tips reported on line 1 of Form 1040 or line 1a of Form 1040NR.
Step 2 - Enter any business income or loss reported on line 3 of federal Schedule 1.
Step 3 - Enter any capital gains or losses reported on line 7 of Form 1040 or line 7 of Form 1040NR.
Step 4 - Enter any other gains or losses reported on line 4 of federal Schedule 1.
Step 5 - Enter any supplemental income or loss reported on a Schedule E, such as income from rental real estate, royalties, partnerships, S
corporations, estates, trusts, REMICs, etc. This is reported on line 5 of federal Schedule 1.
Step 7 - Enter any unemployment compensation reported on line 7 of federal Schedule 1.
Step 8 - Enter any other trade or business income, gain, or loss not reported on steps 1 through 7 that you reported on your tax return.
Step 9 - Combine all entries from steps 1 through 8 on step 9. The resulting gure can be a positive or negative number.
Step 10 - Combine the amount of income, gains, or losses on step 10 that were entered on steps 1 through 8 and are not from a trade or
business. Include the amounts reported on line 4 of Schedule KSNC, line 4 of Schedule KFNC, and line 4 of Schedule KPINC.
Step 11 - Enter the opposite of the amount from step 10 on step 11.
Step 14 - Add steps 12 and 13. If the result is negative, you have an excess business loss. Include this amount as a positive number on line
14 of Schedule M1NC. You will need to keep a record of your excess business loss from each tax year since it is treated as a net
operating loss (NOL) carryover. Use this amount on step 3 of the net operating loss carryover to tax year 2020 worksheet. If the
result is positive, you do not have an excess business loss.
Line 18 — Employer credit for paid medical leave and employer payroll credit for required paid family leave
(FFCR Act Sec. 7001, 7003; TCDTR Act Sec. 142; TCDTR20 Sec. 119)
FFCR Act Sec. 7001. Employer Credit for Paid Medical Leave
If you received the Employer Credit for Required Paid Medical Leave under the FFCR Act section 7001, include the amount of the credit
which was included in your federal income as a negative amount.
FFCR Act Sec. 7003. Employer Payroll Credit for Required Paid Family Leave
If you received the Employer Credit for Paid Family and Medical Leave under the FFCR Act section 7003, include the amount of the credit
which was included in your federal income as a negative amount.
TCDTR Act Sec. 142. Employer credit for paid family and medical leave
Expansion of the employer tax credit for paid family and medical leave to tax year 2020. Wages used in determining the credit are not
allowed a business deduction.
Line 19 — Basis and depreciaon provisions (TCDTR Act Sec. 114, 115, 116, 117, 118, 130, 131, 132 and
TCDTR20 Sec. 137, 115, 138, 116, 118, 102)
To report the dierences for Minnesota tax purposes on line 19, you must attach to your Schedule M1NC a list of the federal provisions
aecting your taxable income by section numbers listed below and show how you calculated each adjustment amount.
Subtotal all nonconformity adjustments (positive and negative) calculated from the provisions listed. If the net of all adjustments results in an
increase to income, enter as a positive amount on line 19. If the net of all adjustments results in a decrease, enter as a negative on line 19.
Include the following amounts reported on Schedules KFNC, KSNC, and KPINC as a positive number on line 19:
• Line 8 of Schedule KFNC
• Line 8 of Schedule KSNC
• Line 8 of Schedule KPINC
TCDTR Act Sec. 114. Classicaon of certain racehorses as 3-year property (TCDTR20 Sec. 137)
If you own racehorses and you claimed a 3-year recovery period on your federal return, calculate the dierence between the 3-year recovery
period and the recovery period you would have been allowed under 2018 IRC. If your recovery period reported on your federal return is
greater than the recalculated amount, include the dierence as a positive number. If your recovery period reported on your federal return is
less than the recalculated amount, include the dierence as a negative number.
TCDTR Act Sec. 115. 7-year recovery period for motorsports entertainment complexes (TCDTR20 Sec. 115)
If you have a motorsports entertainment complex and you claimed a 7-year recovery period on your federal return, calculate the dierence
between the 7-year recovery period and the recovery period you would have been allowed under 2018 IRC. If your recovery period reported
on your federal return is greater than the recalculated amount, include the dierence as a positive number. If your recovery period reported on
your federal return is less than the recalculated amount, include the dierence as a negative number.
TCDTR Act Sec. 116. Accelerated depreciaon for business property on Indian reservaons (TCDTR20 Sec. 138)
If you have qualied Indian reservation property and claimed accelerated depreciation, calculate the depreciation you would have been
allowed under 2018 IRC. If your depreciation reported on your federal return is greater than the recalculated amount, include the dierence
as a positive number. If your depreciation reported on your federal return is less than the recalculated amount, include the dierence as a
negative number.
TCDTR Act Sec. 117. Expensing rules for certain producons (TCDTR20 Sec. 116)
If you were allowed to deduct instead of capitalizing expenditures related to qualied lm, television, and theatrical productions on your
federal return, include the excess expenses deducted as a positive number.
TCDTR Act Sec. 118. Empowerment Zone Tax incenves (TCDTR20 Sec. 118)
If you had a tax change relating to an empowerment zone that impacted your FTI on your federal return, reverse the tax impacts to your FTI.
TCDTR Act Sec. 130. Special allowance for second generaon biofuel plant property
If you were allowed to deduct the additional rst-year 50-percent bonus depreciation for cellulosic biofuel facilities on your federal return,
include the additional depreciation as a positive number.
TCDTR Act Sec. 131. Energy ecient commercial buildings deducon (TCDTR20 Sec. 102)
If you claimed an energy ecient commercial buildings deduction on your federal return that impacted your FTI, reverse the tax impacts to
your FTI.
TCDTR Act Sec. 132. Special rule for sales or disposions to implement FERC or state electric restructuring policy for qualied electric
ulies
If you elected to recognize gain from qualifying electric transmission transactions ratably over an eight-year period on your federal return,
include the amount of the deferred gain as a positive number.
Line 20 — Credit provisions impacng basis and depreciaon (TCDTR Act Sec. 112, 122, 124, 125, 126, 129,
141, 144 and TCDTR20 Sec. 140, 142, 143, 144, 146, 112, 106)
To report the dierences for Minnesota tax purposes on line 20, you must attach to your Schedule M1NC a list of the federal provisions
aecting your taxable income by section numbers listed below and show how you calculated each adjustment amount.
4
5
Subtotal all nonconformity adjustments (positive and negative) calculated from the provisions listed. If the net of all adjustments results in an
increase to income, enter as a positive amount on line 20. If the net of all adjustments results in a decrease, enter as a negative on line 20.
Include the following amounts reported on Schedules KFNC, KSNC, and KPINC as a positive number on line 20:
• Line 9 of Schedule KFNC
• Line 9 of Schedule KSNC
• Line 9 of Schedule KPINC
TCDTR Act Sec. 122. Second generaon biofuel producer credit (TCDTR20 Sec. 140)
If you claimed the Second Generation Biofuel Producer Credit on your federal return that impacted your Federal Taxable Income (FTI),
reverse the tax impacts to your FTI.
TCDTR Act Sec. 124. Qualied fuel cell motor vehicles (TCDTR20 Sec. 142)
If you claimed the credit for Qualied Fuel Cell Motor Vehicles on your federal return that impacted your FTI, reverse the tax impacts to your
FTI.
TCDTR Act Sec. 125. Alternave fuel refueling property credit (TCDTR20 Sec. 143)
If you claimed the Alternative Fuel Refueling Property Credit on your federal return, adjust the property’s basis without regard to the basis
reduction required under 2020 IRC. Include any adjustments to FTI as a result of this Minnesota change in basis.
TCDTR Act Sec. 126. 2-Wheeled plug-in electric vehicle credit (TCDTR20 Sec. 144)
If you claimed the 2-Wheeled Plug-In Electric Vehicle Credit on your federal return, adjust the vehicle’s basis without regard to the basis
reduction required under 2020 IRC. Include any adjustments to FTI as a result of this Minnesota change in basis.
TCDTR Act Sec. 129. Energy ecient homes credit (TCDTR20 Sec. 146)
If you claimed the Energy Ecient Homes Credit on your federal return, adjust the property’s basis without regard to the basis reduction
required under 2020 IRC. Include any adjustments to FTI as a result of this Minnesota change in basis.
TCDTR Act Sec. 141. New Markets Tax credit (TCDTR20 Sec. 112)
If you claimed a New Markets Tax Credit, adjust the basis of the qualied equity investment property by the amount of the credit.
TCDTR Act Sec. 144. Certain provisions related to beer, wine, dislled spirits (TCDTR20 Sec. 106)
If your depreciation and property basis for beer, wine, and distilled spirits was impacted by the changes to the aging period, reverse the tax
impacts accordingly.
Line 21 — Credit Provisions Impacng Business Expenses (TCDTR Act Sec. 111, 113)
To report the dierences for Minnesota tax purposes on line 21, you must attach to your Schedule M1NC a list of the federal provisions
aecting your taxable income by section numbers listed below and show how you calculated each adjustment amount.
Subtotal all nonconformity adjustments (positive and negative) calculated from the provisions listed. If the net of all adjustments results in an
increase to income, enter as a positive amount on line 21. If the net of all adjustments results in a decrease, enter as a negative on line 21.
Include the following amounts reported on Schedules KFNC, KSNC, and KPINC as a positive number on line 21:
• Line 10 of Schedule KFNC
• Line 10 of Schedule KSNC
• Line 10 of Schedule KPINC
TCDTR Act Sec. 111. Indian Employment Credit
If you were not allowed to deduct expenses due to the Indian Employment Credit on your federal return, include the amount of the disallowed
expenses as a negative number.
TCDTR Act Sec. 113. Mine Rescue Team Training Credit
If you were not allowed to deduct expenses due to the Mine Rescue Team Training Credit on your federal return, include the amount of the
disallowed expenses as a negative number.
Line 23 - TCDTR20 basis and depreciaon provisions (TCDTR20 Act Sec. 201, 202, 203, and 204)
TCDTR20 Sec. 201. Low Income Housing tax credit rate
If you claimed the Minimum Low-Income Housing Tax Credit on your federal return, adjust the property’s basis without regard to the basis
adjustments required under current federal law. Include the dierence between the basis under the 2018 IRC and current federal law on line 23.
TCDTR20 Sec. 202. 30-year residenal real property depreciaon
If you had certain residential property and claimed depreciation using a 30-year recovery period on your federal return, calculate the dierence
between the 30-year recovery period and the recover period allowed under the 2018 IRC. Include the dierence as a positive number on line
23.
TCDTR20 Sec. 203. Waste energy recovery property
If you claimed the Energy Credit for waste energy recovery property on your federal return, adjust the property’s basis to what is allowed
under the 2018 IRC. Include the dierence between the basis under current federal law and basis under the 2018 IRC on line 23.
TCDTR20 Sec. 204. Energy credit for oshore wind facilies
If you claimed the Energy Credit for oshore wind facilities on your federal return, adjust the property’s basis to what is allowed under the
2018 IRC. Include the dierence between the basis under current federal law and basis under the 2018 IRC on line 23.
Also include amounts from line 14 of Schedules KFNC, KSNC, and KPINC.
Line 24 - Loans, grants, and loan repayment assistance under the CARES Act excluded from income (COVIDTR
Act Secons 277 and 278)
Include the following amounts on line 24 which were excluded from your federal adjusted gross income:
• Emergency nancial aid grants received under CARES Act section 18004
• Loans forgiven under CARES Act section 1109
• Emergency Economic Insurance Disaster Loan (EIDL) Grants under CARES Act section 1110(e)
• Payments made on your behalf under CARES Act section 1112(c)
• Funding under section 331 of the Economic Aid to Hard-hit Businesses, Non-prots, and Venues Act
Also include amounts from line 15 of Schedules KFNC, KSNC, and KPINC.
Line 25 - Temporary Allowance of Full Deducon for Business Meals (COVIDTR Act 210)
If you deducted more than 50% of the cost for food or beverages provided by a restaurant under this provision, enter the amount of the
deduction that exceeds 50% of the cost. Also include amounts from line 16 of Schedules KFNC, KSNC, and KPINC.
Include the amount as a positive amount.
Line 31 — Adjustments Due to Limitaons Based on Adjusted Gross Income
The following items are limited based on your Minnesota adjusted gross income. If you reported any of the following on your federal return,
you may need to adjust your Minnesota return. Complete the appropriate worksheets listed below and enter the adjustment on line 31 of this
schedule.
Rental real estate losses. Complete the Worksheet for Line 31 – Rental Real Estate Losses if line 7 of your federal Schedule 8582 was less
than $150,000.
Social Security income. Complete the Worksheet for Line 31 – Social Security Income if you include less than 85% of your Social Security
benets in your federal taxable income.
IRA deducon. Complete the Worksheet for Line 31 – IRA Deduction if you deducted contributions to an IRA on your federal return. If you
were required to complete a worksheet in IRS Publication 590-A, complete that worksheet using Minnesota income amounts.
Student loan interest. Complete the Worksheet for Line 31 – Student Loan Interest if you deducted student loan interest on your federal
return.
Worksheet for Line 31 — Rental Real Estate Losses
Before you complete this worksheet, you will need to complete federal Form 8582.
1 Enter the amount from line 6 of your federal Form 8582 .............................................
2 Enter the amount from line 7 of your federal Form 8582 .............................................
3 Enter the total from lines 1 through 30 of Schedule M1NC ...........................................
4 Add steps 2 and 3...........................................................................
5 Subtract step 4 from step 1 (if zero or less, enter 0 here and on step 13) .................................
6 Multiply step 5 by 50% (0.5). Do not enter more than the amount on line 9 of your federal Form 8582. .........
7 Enter the lesser of line 5 of your federal Form 8582 or step 6 of this worksheet. If line 2c of your federal Form
8582 is negative, go to step 8. Otherwise, go to step 12. .............................................
8 Enter the amount from line 11 of your federal Form 8582 ............................................
9 Enter the amount from line 12 of your federal Form 8582 ............................................
10 Subtract step 7 from step 9....................................................................
11 Enter the smallest of line 2c (treated as a positive amount) from your federal Form 8582, step 8, or step 10 ......
12 Enter the amount from line 15 of your federal Form 8582 ............................................
13 Add steps 7, 11, and 12. ......................................................................
14 Enter the amount from line 16 of your federal Form 8582. ...........................................
15 Subtract step 13 from step 14. Include the result on line 31 of Schedule M1NC.
If the result is negative, enter as a negative amount on line 31.........................................
Worksheet for Line 31 – Social Security Income
1 Amount from line 7 of your federal Social Security Benets Worksheet ................................
2 Enter the total from lines 1 through 30 of Schedule M1NC. Also include the amount from
step 15 of the Worksheet for Line 31 – Rental Real Estate Losses......................................
3 Add steps 1 and 2 ..........................................................................
4 If you are:
• Married Filing Jointly, Enter $32,000
• Single, Head of Household, Qualifying Widow(er), or Married Filing Separately
and lived apart from your spouse for all of 2020, enter $25,000
• Married ling separate and you lived with your spouse at any time in 2020, skip steps 4 through 11; multiply
step 3 by 85% (0.85) and enter the result on step 12. Then, go to step 13 .............................
5 Subtract step 4 from step 3 (if zero or less, enter 0 on step 14) .......................................
6 If you are:
• Married Filing Jointly, enter $12,000
• Single, Head of Household, Qualifying Widow(er), or Married Filing Separately and you lived apart
from your spouse for all of 2020, enter $9,000 .................................................
7 Subtract step 6 from step 5 (if zero or less, enter 0) ................................................
8 Enter the lesser of step 5 or step 6 .............................................................
9 Multiply step 8 by 50% (0.50) ................................................................
10 Enter the lesser of step 9 or 50% of the total amount from box 5 of your Forms SSA-1099 and RRB-1099 .....
11 Multiply step 7 by 85% (0.85). If step 7 is zero, enter 0 ............................................
12 Add steps 10 and 11........................................................................
13 Enter the amount from step 17 of your worksheet for federal Form 1040, line 6b..........................
14 Enter the lesser of step 12 or step 13 ...........................................................
15 Enter the amount from federal Form 1040, line 6b.................................................
16 Subtract step 15 from step 14 and include it on Schedule M1NC, line 31. If the result is negative,
enter as a negative amount on line 31. ..........................................................
6
7
Worksheet for Line 31 — Minnesota IRA Deducon
Before completing this worksheet, you will need to complete the following other worksheets:
• Federal IRA Deduction Worksheet - Schedule 1, Line 19
• Worksheet for Line 31 - Rental Real Estate Losses (if required) on the previous page
• Worksheet for Line 31 - Social Security Income (if required) on the previous page
Your IRA Spouse's IRA
1 Enter the amount shown below that applies to you ..................................1a 1b
* Single, Head of Household, or Married Filing Separately and you lived apart from your
spouse for all of 2020, enter $75,000
* Qualifying Widow(er), enter $124,000
* Married Filing Jointly, enter $124,000 in both columns.
If one spouse was not covered by a retirement plan, enter $206,000 for the spouse who was not covered
* Married ling separately and you lived with your spouse at any time in 2020 enter $10,000
2 Enter the sum of the following amounts:
• Lines 1 through 30 of Schedule M1NC
• Step 15 of the Worksheet for Line 31 - Rental Real Estate Losses
• Step 16 of the Worksheet for Line 31 - Social Security Income
• Amounts on your federal Form 1040, line 9 ...................................... 2
3 Enter the total of the amounts from Form 1040, Schedule 1, lines 10 through 18a, plus any write-in
adjustments you entered on the dotted line next to line 22. ............................ 3
4 Subtract step 3 from step 2. If Married Filing Jointly, enter the result in both columns. ......4a 4b
5 Is the amount on step 4 less than the amount on step 1?
No: None of your IRA is deductible for Minnesota purposes. Include the amount you
entered on line 19 of federal Schedule 1 on line 31 of Schedule M1NC.
Yes: Subtract step 4 from step 1.................................................5a 5b
6 Using the amount on step 5, determine the amount to enter based on the instructions below ..6a 6b
* If Single, Head of Household, or Married Filing Separately,
and the result is $10,000 or more, enter $6,000 ($7,000 if age 50 or older but under 70 1/2 at the end of 2020)
for that column on steps 6 and 7. If the result is less than $10,000, go to step 7.
* If Married Filing Jointly or Qualifying Widow(er), and the result is $20,000 or more
($10,000 or more in the column for the IRA of the person not covered by a retirement plan),
enter $6,000 ($7,000 if age 50 or older but under age 70 1/2 at the end of 2020)
for that column on steps 6 and 7. Otherwise, go to step 7.
7 Multiply step 5 by the percentage you used to determine step 7 of your federal worksheet for
line 19 of federal Schedule 1. Increase the result to the next $10 increment ...............7a 7b
If you checked “No” on line 1a of the federal worksheet for line 19 (and “No” on line 1b if married ling jointly),
enter the applicable amount below on step 7a (and step 7b if applicable).
• $6,000, if under age 50 at the end of 2020
• $7,000, if age 50 or older but under age 70 1/2 at the end of 2020
8 Enter the sum of steps 8 and 9 of the worksheet for line 19 of federal Schedule 1 .......... 8
9 Enter the amount from step 11 of the worksheet for line 19 of federal Schedule 1 .......... 9a 9b
10 Enter the smallest of steps 7a, 8, or 9a on step 10a. Enter the smallest of
steps 7b, 8, or 9b on step 10b. If you elected to deduct a smaller amount on your
federal return, reduce the amount for this line by the amount you elected to treat as a
nondeductible contribution on your federal return. .................................. 10a 10b
11 Add steps 10a and 10b ....................................................... 11
12 Enter the amount from line 19 of federal Schedule 1 ................................ 12
13 Subtract step 11 from step 12. Enter the result on line 31 of Schedule M1NC.
If the result is negative, enter as a negative amount. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Save this worksheet and your 2020 Minnesota income tax return for your records until at least 3½ years after you le your Minnesota return for
the year in which your IRA balance became $0.
Worksheet for Line 31 — Student Loan Interest
If you are required to complete any of the other worksheets for line 31, you must complete those worksheets before completing
this worksheet.
1 Enter the total interest you paid in 2020 on qualied student loans (see instructions for
line 20 of federal Schedule 1). Do not enter more than $2,500 ....................................
2 Enter the amount from line 9 of federal Form 1040..............................................
3 Enter the total from lines 1 through 30 of Schedule M1NC. Also include the amount from step 15
of the Worksheet for Line 31 - Rental Real Estate Losses; step 16 of the Worksheet for Line 31 -
Social Security Income, and the amount from step 13 of the Worksheet for Line 31 -
Minnesota IRA Deduction .................................................................
4 Enter the sum of the totals from any other worksheets for line 31 that you completed.
If the result is negative, enter as a negative amount..............................................
5 Add steps 2 through 4.....................................................................
6 Enter the total of the amounts from your federal lines 10 through 18a of your federal
Schedule 1 plus any write-in adjustments on line 22 .............................................
7 Subtract step 6 from step 5.................................................................
8 If your ling status is Single, Head of Household, or Qualifying Widow(er), enter $70,000.
If your ling status is married ling joint, enter $140,000.........................................
9 Subtract step 8 from step 7. If the result is $0 or less, skip steps 10 and 11, and enter the
amount from step 1 on step 12 ..............................................................
10 Divide step 9 by $15,000 ($30,000 if married ling jointly). Enter the result as a decimal rounded
to at least three places. If the result is 1.000 or more, enter 1.000...................................
11 Multiply step 1 by step 10 .................................................................
12 Subtract step 11 from step 1 ................................................................
13 Enter the amount from line 20 of federal Schedule 1.............................................
14 Subtract step 12 from step 13. Enter the result on line 31 of Schedule M1NC.
If the result is negative, enter as a negative amount. .............................................
Line 32
Include this amount on Form M1PR, Homestead Credit Refund (for Homeowners) and Renter’s Property Tax Refund:
• Line 5, if positive
• Line 11, if negative (enter as a positive amount on Form M1PR)
Line 34 — Minnesota Adjusted Gross Income
If you are claiming the social security subtraction on line 39 of Schedule M1M, Income Additions and Subtractions, use the Worksheet for
Line 39 of Schedule M1M below to determine your subtraction.
If you are ling the following forms, use the amount from line 34 on the appropriate lines:
• Line 1 of Schedule M1CD, Child and Dependent Care Credit
• Line 1 of Schedule M1ED, K -12 Education Credit
• Line 3 of Schedule M1WFC, Minnesota Working Family Credit
• Lines 2 and 21 of Schedule M1SA, Minnesota Itemized Deductions
• Line 18 of Schedule M1CAT, Casualty and Theft
• Line 9 of Schedule M1R, Age 65 or Older/Disabled Subtraction
• Line 1 of Schedule M1MT, Alternative Minimum Tax
• Line 2 of Schedule M1SLC, Student Loan Credit
• Line 1 of Schedule M1CR, Credit for Income Tax Paid to Another State (use this amount in the instructions for line 1)
Use line 34 of Schedule M1NC on the following worksheets:
• Form M1 - Step 1 of the Worksheet for Line 4 – Standard Deduction Limitation
• Form M1 - Step 4 of the Worksheet for line 5 – Dependent Exemptions
• Schedule M1SA - Step 5 of the Worksheet for Line 26
• Schedule M1529 - Step 3 of the Worksheet for Line 5 (529 Credit)
8
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2020 Schedule M1NC, Federal Adjustments (Minnesota Department of Revenue)

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Completed 7 February 2021

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