Here is a late-breaking update about estimated payments of Minnesota income taxes.
As noted in our previous post, the Minnesota Department of Revenue is requiring individual taxpayers to submit estimated taxes for the first quarter of the 2020 tax year by April 15. Those payments were not postponed by the emergency actions involving coronavirus.
On Friday (April 10), Minnesota Revenue announced three formulas that will avoid penalties, interest or extra taxes. Taxpayers will be safe if they base the payments on:
- 90 percent of their estimated tax liability for 2020 or
- 100 percent of the taxes they paid for the 2019 tax year. (Exception: It’s 110 percent for those with state adjusted gross incomes over $150,000.)
- 75 percent of Minnesota income tax paid for tax year 2018.
The guidance applies to taxpayers who are individuals, partnerships, fiduciaries and S-corporations reporting on a calendar year basis. They may or may not need to pay estimated taxes in Minnesota, depending upon their individual tax situations.