Tax Update February 2002
Clarifications and corrections to 2001 Minnesota tax forms and instructions Number 02-1
Individual income tax Property tax refund
Schedule M1CR If your client qualifies for the credit and did Form M1PR
Worksheet in line 6 instructions not itemize deductions, enter on Schedule
M1LTI the amount from line 1 on line 5. Line 8
For taxpayers who paid taxes to a Canadian
Skip lines 2 through 4. There is an error on line 8 of the
province or territory, step 3 of the line 6
Minnesota 2001 Form M1PR, Property
worksheet on Schedule M1CR is incomplete. Envelopes used to remit Form Tax Refund Return.
Step 3 should read: M14 payments
When preparing returns, please use the
“Subtract step 2 from step 1, and assume Beginning January 1, 2002, our mailing
following instructions for line 8 instead
for purposes of this step that the result is address used to receive individual esti-
of the instructions on the form.
a positive rather than a negative number.” mated tax payments has changed. The new
address is: “Line 8. Subtract line 7 from line 6.
A corrected M1CR is available on our Minnesota Revenue If the result is zero or less, fill in 0.
website. P. O. Box 64037 See instructions, page 9, for limits.
St. Paul, MN 55164-0037 This is your total household
Schedule M1LS income.”
Line 2 instructions Because return envelopes using the old
On line 14 of Form M1, we instruct mailing address were provided to taxpayers If you’re using tax preparation software,
taxpayers to fill in a zero if the amount is in error with the M14 payment vouchers, make sure the program is calculating
zero or less. Therefore, the second para- we will continue to accept payments that line 8 correctly. Contact the software
graph in the line 2 instructions for Sched- are sent to the old address. developer if you have problems.
ule M1LS needs clarifying. We will not be providing revised forms.
Please use or instruct your clients to use the
The second paragraph should read: correct mailing address whenever possible. Use the forms you already have and
simply make the adjustment. If a return
“If line 4 minus line 13 of your Form M1 is: The mailing address printed on the M14 is calculated incorrectly, we will correct
payment vouchers is correct. it and adjust the refund.
• zero, assume for purposes of this line
that the actual number is a positive C corporations that converted to A corrected Form M1PR is available on
rather than a negative number...” S corporations in 2001 our website.
The remaining instructions are correct. ACRS modifications
Minnesota now conforms to federal Form M1PRX
A corrected Schedule M1LS is available on
depreciation on all property for tax years PV48 payment voucher
beginning after 2000, and the Minnesota
Schedule M1M modification for ACRS and MACRS On line 6 of the 2001 Form M1PRX,
depreciation of property placed in service Amended Property Tax Refund Return,
Worksheet in line 7 instructions taxpayers are instructed to complete and
Step 3 of the line 7 worksheet on Schedule before 1988 has been repealed.
attach payment voucher PV48 if they
M1M is incomplete. Step 3 should read: As a result, corporations must claim the owe an amount.
“Subtract step 2 from step 1, and assume unused portion of the ACRS modifications
in 2001 [290.01, subd. 19e(f)]. Individuals, Printed vouchers will not be available
for purposes of this step that the result is until late spring. In the meantime,
a positive rather than a negative number.” on the other hand, were required to
subtract all unused ACRS depreciation on please instruct your client to mail the
A corrected M1M is available on our his or her 2000 Minnesota return. payment with their Form M1PRX.
In the case where a corporation was a C
Schedule M1LTI corporation for tax years ending on or
Clarification before December 30, 2001, and then
To qualify for the long-term care insurance converted to an S corporation in calendar
credit, taxpayers are not required to itemize
deductions on their federal tax return. continued on next page
Minnesota Department of Revenue—Mail Station 5510—St. Paul, MN 55146-5510
Phone: Twin Cities 651-296-3781 or toll-free 1-800-652-9094
TTY users: 651-297-2196 or through Minnesota Relay at 7-1-1.
Pub. No. 1001850 If you need information in an alternative format, such as large print or audio tape, we will provide it.
First Class Mail
ST. PAUL, MN 55146-7701 PAID
Permit No 171
St. Paul MN
Minnesota Tax Update 02-1
Individuals (continued) Tips and reminders
year 2001, the corporation’s remaining New Schedule M1W signature area, type in your name. Other-
ACRS modifications are allowed to flow For each client who is claiming Minnesota wise, sign your name to the right of the
through to its shareholders on a prorata withholding, you must complete and attach taxpayer’s signature and above your PTIN
basis. The subtraction must be claimed by the new Schedule M1W, Withholding number.
the shareholder in the same tax year in Information, to the Form M1.
which he or she first reports flow-through
Electronic Package XM
income or loss from the S corporation. Also, be sure to instruct your clients who We have electronically bundled the most
are filing a paper return to keep the state commonly used forms and instructions—
For 2001, if your client is a shareholder and copy of their W-2 forms with the rest of by tax type—for downloading on your
is claiming this subtraction, report the their tax records. Do not attach or send in computer. These files are in a compressed,
amount on line 10 of his or her 2001 the W-2s with their Form M1. “zipped” format, which greatly reduces the
Minnesota Schedule M1M, and print download time and eliminates the need to
“ACRS subtraction from new 2001 S If you use a tax software package, be sure
download and save forms individually.
corporation” to the left of line 10. Schedule M1W is included when you print
out a complete copy of the return. No special software is required, however,
Form M1 instruction booklet you will need the free Adobe Acrobat
Incorrect date on the front cover
Tax preparer signature line Reader software to view and print the forms.
Department representatives will be On most tax software packages, the line on
which the tax preparer should sign is not Instructions on how to download and
available to answer calls on Saturday,
visible when the form is printed. This is due unzip the form packages, and access to the
April 13 from 9:00 a.m. — 2:00 p.m.
to accommodate the department’s new free Adobe Acrobat Reader software are
scanning equipment. provided on our website.
If you are using a tax software package that Click on tax professionals on the left side of
allows you to enter information in the the screen and follow the links for tax
preparers. Be sure to bookmark the web
page for easy access.
Taxpayer satisfaction survey results Be sure to instruct your client to use Form
The Department of Revenue conducted how satisfied they were with their M60, Income Tax Return Payment, if he or
a statewide survey in the summer of preparer’s service, and she owes taxes on Form M1 and is paying
2001 to measure Minnesota taxpayers’ by check. This applies to both paper-filed
which aspects of the filing process were
satisfaction with the process of filing and electronically-filed returns.
their state income taxes. Among other If filing a paper return, instruct your client
things, the survey asked taxpayers: Results from the taxpayer satisfaction survey
that pertain to tax preparers can be found to attach the payment and a completed
why they used a preparer, on our website at www.taxes.state.mn.us. Form M60 to his or her Form M1.
what kind of preparer they used, Click on tax professionals and follow the If filing electronically, taxpayers are to mail
how much they paid for the links for tax preparers. A complete copy of the payment with a completed Form M60
preparer’s services, the results is also available. to Minnesota Revenue, P. O. Box 64054, St.
Paul, MN 55164-0054.