Fillable 2021 Schedule M1NC, Federal Adjustments (Minnesota Department of Revenue)

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2021 Schedule M1NC, Federal Adjustments (Minnesota Department of Revenue)

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2021 Schedule M1NC, Federal Adjustments
Minnesota has not adopted certain federal law changes enacted aer December 31, 2018, that aect federal adjusted gross income for tax year 2021.
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 2021 and excluded from federal income ............................... 1
2 DeduconforIRAcontribuonsofindividualsoverage701/2 ......................................... 2
3 Distribuonsfromhighereducaonsavingsaccountsusedforapprenceshipprogramsorstudentloanpayments. 3
4 EmployerprovidedDependentCareAssistanceProgrambenetsexcludedfromincome.................... 4
5 Thislineintenonallyleblank.................................................................... 5
6 Thislineintenonallyleblank.................................................................... 6
7 Thislineintenonallyleblank ................................................................... 7
8 Thislineintenonallyleblank.................................................................... 8
9 Thislineintenonallyleblank.................................................................... 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underTCDTR20. .................. 12
13 Netoperanglosscarryoversandsuspensionof80%Limitadjustment.................................. 13
13a EnteryourcurrentyearfederalNOLdeducon ............................. 13a
13b EnteryourMNnetoperanglosscarryoverto2022(see instrucons)........... 13b
14 Secon461excessbusinesslosslimitaonadjustment(see Schedule M1LOSS) .......................... 14
14a Enteryourfederalnetoperanglossfor2021............................... 14a
14b EnteryourMinnesotanetoperanglossfor2021(see instrucons) ............ 14b
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
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
*211341*
Rev.3/7/22
19 TCDTRandTCDTR20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
24 Restaurantrevitalizaongrantsexcludedfromincome (see instrucons) ................................ 24
25 Temporaryallowanceoffulldeduconforbusinessmeals(see instrucons).............................. 25
26 Netoperanglossdeduconfromafarmingacvitycarriedbackto2021(see instrucons) ................ 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 IfyoureceivedadistribuonfromanIRAin2021andmadeanadjustmenttoyourallowableMinnesota
deduconforIRAcontribuonsonaprioryearScheduleM1NC,seeinstrucons ......................... 30
If you have an amount on lines 1 through 30 and had rental real estate losses, received social security income, contributed to an IRA, or paid
interest on student loans, see the instrucons and worksheets for lines 31 through 34 to determine your Minnesota deducon.
31 Rentalrealestatelosslimitaon ...................................................................31
32 Taxablesocialsecuritybenets ....................................................................32
33 IRADeducon ..................................................................................33
34 Studentloaninterestdeducon ...................................................................34
35 Addlines1-34.Iftheresultisposive,enteritonFormM1M,line9.
Iftheamountisnegave,enteritasaposivenumberonFormM1M,line31 ...........................35
36 Line1ofFormM1.............................................................................. 36
37 Minnesota adjusted gross income. Addlines35and36,then see instrucons ........................... 37
You must include this schedule when you le Form M1.
*211411*
9995
2021 Schedule M1NC, page 2
Purpose of This Schedule
Rules used to determine Minnesota Individual Income Tax are generally based on the Internal Revenue Code (IRC) as amended through
December 31, 2018, with certain exceptions.
Since that date, federal tax laws were enacted containing provisions aecting tax year 2021. 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, the COVID-Related Tax Relief (COVIDTR) Act, and the American Rescue Plan Act (ARPA) of
2021. Because Minnesota has not adopted certain 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 certain provisions included in the TCDTR, FFCR, CARES, SECURE, TCDTR20, COVIDTR, and ARPA Acts.
Save your entire 2021 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 2021 and excluded from federal income (TCDTR Act Sec. 101 and
TCDTR20 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 2 - Deducon for IRA contribuons of individuals over age 70 1/2
If you claimed a deduction for contributions to an IRA and you were over age 70 1/2 at the beginning of the year, use these instructions to
determine your deduction.
Do not enter an amount on this line if you are claiming an IRA deduction on your federal return and either of these apply:
• You (or your spouse, if Married Filing Jointly) also received Social Security benets (see the instructions for line 32)
• You (and your spouse, if Married Filing Jointly) are under age 70 1/2
On line 2 of Schedule M1NC, enter the full amount claimed on line 20 of federal Schedule 1. Do not complete the Worksheet for Line 33 -
Minnesota IRA Deduction if either of these apply:
• Your ling status is Single, Head of Household, or Married Filing Separately, and you are over age 70 1/2 at the beginning of 2021
• Your ling status is Married Filing Jointly, and you and your spouse are over age 70 1/2 at the beginning of 2021
If your ling status is Married Filing Jointly, and you or your spouse are over age 70 1/2 at the beginning of 2021, enter the full amount of the
deduction claimed on line 20 of Schedule 1 on line 2 of Schedule M1NC.
When you have completed any other required adjustments on Schedule M1NC, complete the Worksheet for Line 33 - Minnesota IRA Deduc-
tion. Enter 0 on step 20 of that worksheet when asked to enter your federal IRA deduction from line 20 of federal Schedule 1.
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 — Employer provided Dependent Care Assistance Program benets excluded from income
Use Part 3 of Schedule M1CD to determine what amount of Dependent Care Assistance Program benets to include on line 4.
Include Schedule M1CD if you enter an amount on line 4.
Line 10 — Exclusion for certain employer payments of student loans (CARES Act Sec. 2206 and TCDTR20 Sec.
120)
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.
2021 Schedule M1NC Instrucons
For taxpayers who are aected by changes to federal tax law passed aer December 31, 2018
1
Line 11 — Employee Retenon Credit under the CARES Act (CARES Act Sec. 2301; TCDTR20 Sec. 206 and 207;
ARPA Sec. 9651)
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 — Net operang loss carryovers and suspension of 80% limit adjustment
If you are claiming a net operating loss deduction from a net operating loss generated in tax years 2018 through 2020, you must recalculate
your allowable deduction for Minnesota purposes. Complete Worksheet for Line 13 – Minnesota Net Operating Loss deduction. You must
provide the worksheet with your return to show how you determined your Minnesota net operating loss deduction.
Line 13a – Enter your current year federal NOL deducon
Enter the amount from line 8a of federal Schedule 1. Do not include this amount in the total on line 35 of Schedule M1NC.
Line 13b – Enter your MN net operang loss carryover to 2022
If you claimed a net operating loss deduction, use the Worksheet for line 13 – MN Net Operating Loss Deduction to determine your Minnesota
net operating loss carryover to 2022, then enter the amount form step 14 of that worksheet on line 13b.
If you had a net operating loss in 2021, use the Worksheet for line 13b – MN Net Operating Loss Carryover to determine you net operating
loss carryover to 2022.
Line 14 — Excess business loss limitaon adjustment (See Schedule M1LOSS)
If you had losses from a trade or business exceeding $262,000 ($524,000 if married ling a joint return) Complete Schedule M1LOSS to
determine your Minnesota loss limitation. Enter the amount from line 23 on line 14.
Line 14a – Enter your federal net operang loss for 2021.
Determine if you have a federal net operating loss. Enter the net operating loss calculated from Worksheet 1 of IRS Publication 536 on line
14a. Do not include this amount in the total on line 35 of Schedule M1NC.
Line 14b – Enter your Minnesota net operang loss for 2021
After you complete Schedule M1NC, use the amount on line 35 of Schedule M1NC to determine your Minnesota net operating loss using
the Figuring your Minnesota Net Operating Loss worksheet on the next page. Enter the result on line 14b. Use this amount and any excess
business loss adjustment from Schedule M1LOSS to complete the Worksheet for Line 13b – Minnesota Net Operating Loss Carryover. The
worksheet will help you determine your Minnesota net operating loss carryover from 2021. If step 26 is less than zero, you have a Minnesota
net operating loss. Enter this amount on line 14b. If step 26 is greater than zero you do not have a Minnesota net operating loss.
2
Worksheet for Line 13 — Minnesota Net Operang Loss Deducon
1 Federal taxable income before NOL deductions....................................................
2 Enter the total from lines 1-12 and 14-30 of Schedule M1NC .........................................
3 Add steps 1 and 2...........................................................................
4 NOL carried from years prior to 2018 (enter as a positive amount) .....................................
5 Subtract step 4 from step 3....................................................................
6 NOL carried from years after 2017 (enter as a positive amount). .......................................
7 Multiply step 3 by 80% (.80) ..................................................................
8 Enter the lesser of step 6 or step 7 ..............................................................
9 Enter the lesser of step 8 or step 5 ..............................................................
10 Add step 4 and step 9. This is your 2021 Minnesota Net Operating Loss Deduction.....................
11 Federal Net Operating Loss Deduction claimed on line 8(a) of Schedule 1 (enter as a positive amount) .........
12 Subtract step 10 from step 11. Enter the result on line 13 of Schedule M1NC .............................
13 Add steps 4 and 6...........................................................................
14 Subtract step 10 from step 13. This amount may be carried to the next year. ..............................
Worksheet for Line 13b — Minnesota Net Operang Loss Carryover
1 Step 26 of your Figuring your Minnesota Net Operating Loss (on the next page), if less than zero .............
2 Portion of step 1 that is a farming loss carried back to 2019 or 2020. Enter as a positive amount ..............
3 Excess business loss from line 21 of Schedule M1LOSS. Enter as a negative amount .......................
4 Combine steps 1 through 3. This is your NOL carryover to 2022.......................................
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%.
Only if you le on a scal year basis, 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 2020 return and made an adjustment on your 2020 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 2021 on line 17. Include this amount as a negative number.
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; ARPA Secon 9641)
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.
Figuring your Minnesota Net Operang Loss
1 Subtract your federal standard deduction or itemized deductions from your federal adjusted gross income ........1
2 Enter the amount from line 35 of Schedule M1NC ....................................................2
3 Add Steps 1 and 2 ..............................................................................3
4 Nonbusiness capital losses before limitation. Enter as a positive number ...................4
5 Nonbusiness capital gains (without regard to section 1202 exclusion) .....................5
6 If step 4 is more than step 5, enter the dierence. Otherwise, enter 0.......................6
7 If step 5 is more than step 4, enter the dierence. Otherwise, enter 0....... 7
8 Nonbusiness deductions. Enter as a positive. .........................................8
9 Nonbusiness income other than capital gains..........................9
10 Add steps 7 and 9 .............................................................10
11 If step 8 is more than step 10, enter the dierence. Otherwise, enter 0 ....................................11
12 If step 10 is more than step 8, enter the dierence. Otherwise, enter 0.
Do not enter an amount greater than step 7. ..........................12
13 Business capital losses before limitation. Enter as a positive number . . . . . . . . . . . . . . . . . . . . . 13
14 Business capital gains (without regard to any section 1202 exclusion) .....14
15 Add steps 12 and 14 ...........................................................15
16 Subtract step 15 from step 13. If less than zero, enter 0 ................................16
17 Add steps 6 and 16.............................................................17
18 If you had a loss on line 16 of federal Schedule D, enter the amount as a positive. If you don’t
have a loss, skip steps 18 through 23, and enter the amount from step 17 on step 24 .........18
19 Enter section 1202 exclusion as a positive amount .................................................. 19
20 Subtract step 19 from step 18. If less than zero, enter 0 ................................ 20
21 If you had a loss on line 21 of federal Schedule D, enter the loss as a positive amount ....... 21
22 If step 20 is more than step 21, enter the dierence. Otherwise, enter 0 ................... 22
23 If step 21 is more than step 20, enter the dierence. Otherwise, enter 0 .................................. 23
24 Subtract step 22 from step 17. If zero or less, enter 0................................................. 24
25 Net operating loss deduction for losses from other years. Enter as a positive amount ....................... 25
26 Combine lines 3, 11, 19, and 23 through 25. If the result is less than zero,
enter it here. If the result is zero or more, you do not have a Minnesota NOL.......................... 26
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 2021. Wages used in determining the credit are not
allowed a business deduction.
Line 19 — Basis and depreciaon provisions (TCDTR Act Sec. 114, 115, 118, 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.
TCDTR20 Sect. 138. Accelerated depreciaon for business property on Indian reservaons, for property placed in service aer December
31, 2020.
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.
TCDTR20 Sec. 116. Expensing rules for certain producons commencing aer December 31, 2020
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.
TCDTR20 Sec. 102. Energy ecient commercial buildings deducon
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.
TCDTR20 Sec. 106. Certain provisions related to beer, wine, dislled spirits
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. Certain beer, wine, and distilled spirits are impacted by nonconformity to TCDTR20. Eective dates generally begin
after December 31, 2020 depending on certain actions taken.
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.
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.
4
5
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.
Line 21 — Credit Provisions Impacng Business Expenses TCDTR Act. Sec. 111, 113; TCDTR20 Sec. 135, 136)
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
TCDTR20 Act Sec. 120. 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.
TCDTR20 Act Sec. 136. 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 22 — Other Adjustments to Federal Adjusted Gross Income
Other adjustments to adjusted gross income, such as Shuttered Venue Operators Grants (SVOG), Economic Injury Disaster Loan (EIDL) grants,
student loan forgiveness under ARPA section 9675, and Small Business Administration loan payments made on your behalf under CARES Act
section 1112(c), should be included on line 22.
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 recovery 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 - Restaurant revitalizaon grants excluded from income (ARPA Sec. 9673)
Include the restaurant revitalization grant on line 24 which were excluded from your federal adjusted gross income.
Also include amounts from line 15 of Schedules KFNC, KSNC, and KPINC.
Line 25 - Temporary Allowance of Full Deducon for Business Meals (TCDTR20 Act Sec. 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 26 — Net operang loss deducon from a farming acvity carried back to 2021
Do not enter an amount on line 26 of your original return. This line is only for losses from farm activities carried back to 2021 from future tax
years and you are amending 2021 to claim a net operating loss deduction.
Line 30 — Distribuons from an IRA with dierent federal and Minnesota basis
You may need to make an adjustment on line 30 because of a dierence between your federal and Minnesota basis in an IRA if all these
apply:
• You received a distribution from an IRA in 2021
• You had an adjustment to income on Schedule M1NC in tax years 2019 or 2020
• You entered an amount on line 9 of the 2019 Schedule M1NC or line 31 of the 2020 Schedule M1NC after completing the IRA deduction
adjustment worksheet for those lines
Combine the adjustments calculated in your IRA deduction limitation worksheets for 2019 and 2020 to determine if line 30 is a positive or
negative adjustment in basis for a 2021 IRA distribution. If the result is positive, then include your dierence in basis as a negative amount on
line 30. If the result is negative, then include your dierence in basis as positive amount on line 30.
Line 31 — Rental real estate loss limitaon
Rental real estate losses are limited based on your Minnesota adjusted gross income. Complete the Worksheet for Line 31 – Rental Real
Estate Losses if line 7 of your federal Schedule 8582 was less than $150,000. Enter the adjustment on line 31 of this schedule.
Line 32 — Taxable Social Security Benets
If you received Social Security benets, you must use one of these methods to determine the taxable portion of them for Minnesota purposes.
Method 1
Use Method 1 if any of these apply:
• You and your spouse did not claim an IRA deduction on your federal return
• You and your spouse included your full IRA deduction on line 2 of Schedule M1NC because you are over 70 ½
• You are not claiming an IRA deduction and your spouse included the full amount of their IRA deduction on line 2 of Schedule M1NC
because they are over 70 1/2
Complete the Worksheet for Line 32 – Social Security Income to determine your taxable Social Security benets.
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 5 of federal Form 8582 .................................................
2 Enter the amount from line 6 of federal Form 8582 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 Enter the total from lines 1 through 30 of Schedule M1NC ...........................................
4 Add steps 2 and 3. If the result is greater than or equal to step 1, skip steps 5 and 6 and enter 0 on step 7.
Otherwise, continue with step 5. ...............................................................
5 Subtract step 4 from step 1. If zero or less, enter 0. .................................................
6 Multiply step 5 by 50% (0.5). Do not enter more than line 8 of Form 8582 ...............................
7 Enter the lesser of line 4 of Form 8582 or step 6 of this worksheet. .....................................
8 Enter the amount from line 10 of Form 8582 ......................................................
9 Add steps 7 and 8. ..........................................................................
10 Enter the amount from line 11 of Form 8582 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11 Subtract step 9 from step 10. Include the result on line 31 of Schedule M1NC ............................
6
7
Method 2
Use Method 2 if both of these apply:
• You or your spouse are claiming an IRA deduction
• The individual claiming the IRA deduction is under 70 1/2
Complete a separate Minnesota worksheet for each of Worksheets 1 through 3 of Appendix B in IRS Publication 590-A. To determine your
Minnesota IRA deduction and taxable Social Security benets on these worksheets follow the federal instructions but with the following modi-
cations:
• On line 1 of your Minnesota Worksheet 1, include adjustments to AGI from lines 1, 3, 4, 10 - 25, 30, and 31 of Schedule M1NC.
• On your Minnesota Worksheet 2, only enter your IRA contributions for those under 70 1/2. This amount should not be reported on line 2 of
Schedule M1NC.
• On your Minnesota Worksheet 2, subtract the amount from line 7 of your federal worksheet from line 7 of your Minnesota worksheet. Enter
the result on line 33 of Schedule M1NC.
• On your Minnesota Worksheet 3, subtract the amount from line 19 of your federal worksheet from line 19 of your Minnesota worksheet.
Enter the result on line 32 of Schedule M1NC.
• Do not use the Worksheet for Line 33 in Schedule M1NC to determine your IRA deduction.
Worksheet for Line 32 – Social Security Benets
1 Total amount from box 5 of all your Forms SSA and RRB-1099 .....................................
2 Multiply step 1 by 50%.....................................................................
3 Combine amounts from Form 1040 or 1040-SR lines 1, 2b, 3b, 4b, 5b, 7 and 8 ..........................
4 Form 1040 or 1040-SR line 2a (tax exempt interest)...............................................
5 Combine amounts from lines 1 through 25, 30, and 31 of Schedule M1NC .............................
6 Combine step 2, 3, 4, and 5..................................................................
7 Enter the total of the amounts from Schedule 1, lines 11 through 19a, and 23 and 25 ......................
8 This step intentionally left blank..............................................................
9 Add steps 7 and 8 .........................................................................
10 If step 9 is less than step 6, subtract step 9 from step 6. ............................................
If step 9 is more than step 6, none of your Social Security is taxable. Skip steps 11 through 20,
enter 0 on step 21 and continue to step 22.
11 If you are: ...............................................................................
• Married ling jointly enter $32,000
• Single, Head of household, Qualifying widower, Married ling separately enter $25,000
• Married ling separately and lived with spouse, skip step 11 through 18. Multiply step 10 by 85%,
enter result on step 19, and continue to step 20
12 If step 11 is less than step 10, subtract step 11 from step 10 ..........................................
If step 11 is more than step 10, none of your social security benets are taxable. Skip steps 13 through 20,
enter 0 on step 21 and continue to step 22.
13 If you are: ...............................................................................
• Married ling jointly enter $12,000
• Single, head of household, qualifying widower, or married ling separately enter $9,000
14 Subtract 13 from 12. If less than zero, enter 0 .....................................................
15 Enter smaller of step 12 or 13 .................................................................
16 Multiply step 15 by 50%.....................................................................
17 Enter smaller of step 2 or step 16 ..............................................................
18 Multiply line 14 by 85% .....................................................................
19 Add steps 17 and 18 ........................................................................
20 Multiply line 1 by 85% ......................................................................
21 Enter smaller of steps 19 or 20 ................................................................
22 Enter amount from line 6b of Form 1040 ........................................................
23 Subtract Step 22 from step 21. Enter result on line 32 of Schedule M1NC. If negative, enter as a negative ......
8
Worksheet for Line 33 — Minnesota IRA Deducon
If you were age 70 1/2 or older at the end of 2021, you can’t deduct any contributions made to your traditional IRA or treat them as nondeduct-
ible contributions. Don’t complete this worksheet for anyone age 70 1/2 or older at the end of 2021. If you are married ling jointly and only
one spouse was under age 70 1/2 at the end of 2021, complete this worksheet only for that spouse.
Your IRA Spouse's IRA
1 Were you covered by a retirement plan? Answer Yes or No on Step 1. ................... Yes No Yes No
If you answered No, see instructions
2 Enter the amount shown below that applies to you .................................. 2
• Single, Head of household, married ling separately and lived apart enter $76,000
• Qualifying Widower enter $125,000
• Married ling jointly enter $125,000 if you checked Yes on step 1
• Married ling jointly enter $208,000 if you checked No on step 1
• Married ling separately and you lived with your spouse enter $10,000
3 Enter the amount from line 9 of Form 1040 or 1040-SR............................... 3
4 Combine the amounts included on lines 1, 3 through 26, 31, and 32 of Schedule M1NC ..... 4
5 Add steps 3 and 4 ........................................................... 5
6 Enter the total of amounts from Schedule 1, lines 11 through 19a, plus 23 and 25 .......... 6
7 This step intentionally left blank ................................................. 7
8 Add steps 6 and 7............................................................. 8
9 Subtract step 8 from step 5. Enter the result in both columns. .......................... 9a 9b
10 If the amount on step 9 is less than step 2 continue to step 11.
If the amount on step 9 is more than step 2, none of your IRA is deductible for Minnesota purposes.
Stop here, and include the amount you entered on line 20 of federal Schedule 1 on line 33 of Schedule M1NC.
11 Subtract step 9 from step 2. If your ling status is single, head of household, or married ling separately and the result
is less than $10,000, go to step 12. If the result is $10,000 or more, enter one of the following amounts on step 12 and go to step 13.
• $6,000 if under age 50 at the end of 2021
• $7,000 if over age 50 at the end of 2021
If you are married ling jointly or a qualifying widower, and the result is $20,000 or more
($10,000 in the column that entered No on step 1), enter one of the following amounts on step 12 and go to step 13.
• $6.000 if under age 50 at the end of 2021
• $7,000 if over age 50 at the end of 2021
Otherwise, go to step 12 ....................................................... 11a 11b
12 Multiply the amounts on step 11 by the following percentages. Round the result up to the
nearest multiple of $10. If the result is less than $200, enter $200.
• If single, head of household, married ling separately use 60% (.60) or if over age 50 at the
end of 2021, use 70% (.70)
• If married ling jointly and answered Yes on step 1, use 30% (.30) or in the column of a person
who is over age 50 at the end of 2021, use 35% (.35). In the column for people who answered No
on step 1, use 60% (.60) or 70% (.70) if over age 50 at the end of 2021................. 12a 12b
13 Enter the total of your ( and your spouse’s if ling a joint return):
• Wages, salaries, tips
• Alimony reported on line 2a of Schedule 1
• Nontaxable combat pay from box 12 of Form W-2 with Code Q ...................... 13
14 Enter the earned income you (and your spouse if ling a joint return) received as
self-employed. This is net earnings minus the deduction on lines 15 and 16 of Schedule 1
If zero or less, enter 0 ......................................................... 14
15 Combine amounts from lines 4 through 25 of Schedule M1NC......................... 15
16 Combine the amounts on steps 13, 14, and 15 ...................................... 16
If married ling jointly and step 16 is less than $12,000 ($13,000 if one spouse is age 50 or older at the end of 2021; $14,000 if both
spouses are age 50 or older at the end of 2021), stop here, and use the worksheet in Pub. 590-A to gure your IRA deduction
17 Enter traditional IRA contributions to your IRA on step 17a and your spouse’s IRA on
step 17b.................................................................... 17a 17b
18 On step 18a, enter the smaller of steps 12a, 16, or 17a ............................... 18a 18b
On step 18b, enter the smaller of steps 12b, 16, or 17b.
19 Combine the amounts on step 18. ............................................... 19
20 Enter the amount from line 20 of federal Schedule 1 ................................ 20
21 Subtract step 19 from step 20. Enter the result on line 33 of Schedule M1NC.
If the result is negative, enter as a negative ........................................ 21
Line 33 — IRA Deducon
Complete the Worksheet for Line 33 – IRA Deduction if you deducted contributions to an IRA Enter the adjustment on line 33 of this
schedule. If you were required to complete a worksheet in IRS Publication 590-A, complete that worksheet using Minnesota income amounts.
If neither you or your spouse are covered by a retirement plan at work and were not required to determine a deduction limitation based on
income on your federal return, do not complete the Worksheet for Line 33 - Minnesota IRA Deduction.
Line 34 — Student loan interest deducon
Complete the Worksheet for Line 34 – Student Loan Interest if you deducted student loan interest on your federal return. Enter the adjustment
on line 34 of this schedule.
Line 35
Add lines 1 through 34 of Schedule M1NC. Do not include amounts reported on lines 13a, 13b, 14a, and 14b in the total entered on line 35.
Include this amount on Form M1PR, Homestead Credit Refund (for Homeowners) and Renter’s Property Tax Refund. However, if you
entered an amount on line 32 of Schedule M1NC to adjust your taxable Social Security benets, combine the amounts from lines 1 through
31, 33, and 34. Enter the amount on Form M1PR:
• Line 5, if positive
• Line 11, if negative (enter as a positive amount on Form M1PR)
Earned income adjustments
If you entered an amount on lines 4, 10 through 12, or 15 through 25, you may need to adjust your earned income on Schedules M1WFC,
M1MA, M1CD, and M1SLC. Use the following instructions and Earned income adjustment worksheet to determine how to make those
adjustments.
To complete lines 1 and 2 of Schedule M1MA, complete an Earned income adjustment worksheet for each spouse. Include the amount from
step 1 of this worksheet on line 1 of the appropriate column of Schedule M1MA. Combine the amounts from steps 2 and 3 of the worksheet
and include the result in the appropriate column of line 2 of Schedule M1MA.
On line 1 of Schedule M1WFC, complete the Worksheet for Earned income in the line 1 instructions. Add step 4 of the Earned income
adjustment worksheet to the amount determined in the worksheet. Enter the result on line 1 of Schedule M1WFC.
On Schedule M1CD, complete a separate Earned income adjustment worksheet for each spouse. Do not enter amounts on step 1 of the
worksheet. Include the result of the Earned income adjustment worksheet with the amount determined using the instructions for lines 2 and 3
of Schedule M1CD.
On Schedule M1SLC, determine earned income for each spouse in each column of line 6. Complete an Earned income adjustment worksheet
for each spouse. Add the result for each worksheet to the appropriate column.
9
Worksheet for Line 34 — Student Loan Interest Deducon
If you are required to complete any of the other worksheets for line 34, you must complete those worksheets before completing
this worksheet.
1 Enter the interest you paid in 2021 on qualied student loans (see instructions for line 21 of federal Schedule 1).
Do not enter more than $2,500. .............................................................
2 Enter the amount from line 9 of federal Form 1040 or 1040-SR....................................
3 Enter the total of lines 1 through 32 of Schedule M1NC ...........................................
4 Add steps 2 and 3 ........................................................................
5 Enter the total of the amounts from Schedule 1, lines 11 through 20, and 23 and 25 ....................
6 Enter IRA deduction adjustment from line 33 of Schedule M1NC ..................................
7 Add steps 5 and 6 ........................................................................
8 Subtract step 7 from step 4.................................................................
9 Enter amount based on ling status ..........................................................
• Single, head of household, qualifying widower - $70,000
• Married ling jointly - $140,000
10 If step 8 is more than step 9, subtract step 9 from step 8 ..........................................
If step 8 is less than step 9, skip steps 10 and 11, enter 0 on step 12, and go to step 13
11 Divide step 10 by $15,000 ($30,000 if married ling jointly). Enter result as decimal (rounded to at
least three places). If the result is more than 1.000, enter 1.000 ....................................
12 Multiply step 1 by step 11 .................................................................
13 Subtract step 12 from step 1. Minnesota student loan interest deduction. .............................
14 Federal student loan interest deduction from line 21 of federal Schedule 1 ...........................
15 Subtract step 13 from step 14. Enter the result on line 34 of Schedule M1NC.
If the result is negative, enter as a negative.....................................................
Earned Income Adjustment Worksheet
1 Enter line 4 .............................................................................
2 Enter the combined total of lines 10 through 12 ................................................
3 Enter the combined total of lines 15 through 25 ................................................
4 Combine steps 1 through 3.................................................................
10
Worksheet for Line 12 of Schedule M1M
Do not complete this worksheet if you did not enter an amount on lines 1-30 of Schedule M1NC.
1 Enter the amount from line 9 of federal Form 1040 or 1040-SR........................................
2 Combine the amounts from lines 1 through 30 of Schedule M1NC......................................
3 Add Steps 1 and 2............................................................................
4 Enter the amount from line 6b of federal Form 1040 or 1040-SR.......................................
5 Enter the amount form line 32 of Schedule M1NC (enter as a negative, if the result was negative) ............
6 Add steps 4 and 5 ............................................................................
7 Subtract step 6 from step 3.....................................................................
8 Enter the amount from line 6a of federal Form 1040 or 1040-SR .......................................
9 Multiply step 8 by 50% (0.50) ..................................................................
10 Enter the amount you included or should have included on line 2a of federal Form 1040 or 1040-SR ..........
11 Add steps 7, 9, and 10 ........................................................................
12 Enter the amount from line 26 of federal Schedule 1.................................................
13 Enter the amount from line 33 of Schedule M1NC ..................................................
14 Combine steps 12 and 13 ......................................................................
15 Combine the amounts from line 21 of federal Schedule 1 and line 34 of Schedule M1NC ...................
16 Subtract step 15 from step 14. If zero or less, enter 0 ................................................
17 Subtract step 16 from Step 11. If zero or less, enter 0 ................................................
18 Enter the amount for your ling status from below:
Married Filing Jointly or Qualifying Widow(er): $80,270
Single or Head of household: $62,710
Married Filing Separate: $40,135
19 Subtract step 18 from step 17. If zero or less, enter 0 ................................................
20 Multiply step 19 by 20% (.20) ..................................................................
21 Enter the amount for your ling status from below ..................................................
Married Filing Jointly or Qualifying Widow(er): $5,290
Single or Head of household: $4,130
Married Filing Separate: $2,645
22 Subtract step 20 from step 21. If zero or less, enter 0 ................................................
23 Enter the amount from step 6 ...................................................................
24 Enter the amount of Tier 1 railroad retirement benets included on line 17 of Schedule M1M ................
25 Subtract step 24 from step 23. If zero or less, enter 0 ................................................
26 Enter step 22 or step 25, whichever is less. Also enter this amount on line 12 of Schedule M1M. ..............
Line 37 — Minnesota Adjusted Gross Income
If you are claiming the social security subtraction on line 12 of Schedule M1M, Income Additions and Subtractions, use the Worksheet for
Line 12 of Schedule M1M below to determine your subtraction.
If you are ling the following forms, use the amount from line 37 on the appropriate lines:
• Line 5 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 37 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)
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2021 Schedule M1NC, Federal Adjustments (Minnesota Department of Revenue)

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Completed 24 March 2022

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