Presentation on theme: "Filing a Minnesota Return"— Presentation transcript:
1 Filing a Minnesota Return Non-Resident AliensFiling a Minnesota Return
2 Minnesota Residency for tax purposes 183 day rule - in Minnesotamust establish a tax home - visa’s are a temporary statusany day or part of a day qualifies as a counted day in MNrent or occupy an abode : self contained living unit, suitable for year-round use, equipped with own cooking and bathing facilitiesVisa’s are for temporary stays, but for tax purposes, residency must be established. If here 183 days or more –state residence for the year. Also need to be here 183 days or more to qualify for PR.
3 Filing a Minnesota return Filing federal Form 8843 – nothing for MNRequired to file a federal return then required to file a MN returnStart with federal taxable income1040NR - line 401040NR-EZ - line 14Itemize on federal- must add back all state income tax on line 2 - do not use schedule in bookletMinnesota adopted additional standard deduction for MFJ - no longer an add back (Only applies to students from India)May qualify for other additions and subtractionsExcept for charitable contributions (subtraction now on schedule M1M)Minnesota requires a copy of the federal enclosedNon-resident aliens, who have been in MN for 183 days or more are considered residents. Full year residents are required to file a state return, if required to file the federal.Not allowed standard deduction, so must itemize. Allowed a state tax deduction, but must add back the amount of state tax claimed.No other specific provision for non-resident aliens, can qualify for other additions and subtractions. Except for Charitable because they itemize.
4 Filing status same as federal A. line 3 (EZ) or line 8 (NR long) B. - C. most likelyblankD. FAGI -line 10 (EZ)line 35 (NR long)Line 1- FTIline 14 (EZ)line 40 (NR long)Go over completing return: do not photo copy, capital letters, printing numbers, dark pen or pencil if not computer generated, whole dollar amts, if line does not pertain to tp leave blank, no symbols, extra notes, don’t staple or tape return.If line 1 is negative, mark x in box.Line 2 - State Taxline 11 (EZ)line 3 Schedule ALine 5 State tax refund line 11 of 1040NR
5 Line 26 M1W show MN withholding only Line 28 M1CD Line 30 K-12 Ed CreditRefund orpayment due1042 –S in place of W-2
6 Filling out the M1W M1W - W-2 Box 15 - MN ID…………... Box 16 - State Wages……...Box 17 - MN Withholding...Only need to fill in this form if there is state taxes withheld…..usually no state tax on 1042S1042SBox 23Box 2 GrossBox 22Box 24 - name of state
8 Minnesota Credits MFS cannot claim credits Must be single or married filing jointlySingle with qualifying child (see pub. 17)Must qualify for the federal creditsMust have Minnesota assignable income
9 Minnesota credits, cont. Child and dependent care credit - M1CDK-12 Education credit – M1ED- paid qualifying expenses for 2006- household income limit and maximum credit are now based on number of qualifying children in K-12 for 2006 (See page 17 of M1 instruction booklet for more information)Marriage credit - MFJ
10 Filing MN as part year resident Schedule M1NR Non-resident/Part year resident form - do not use if only Minnesota source incomeMust have received income while residing in another state
11 Property Tax Return Must be a Minnesota resident - 183 day rule - Dependents are not eligible (50% Rule)Must be self supportingMust live in a unit which is considered an “abode” - cooking and bathing facilitiesProperty taxes paid on unitFiling status is not an issue - living situation1)Cannot be considered someone else’s dependent by federal definition2)Someone from home supporting them, or government agency assistanceOn the PR filing status is not an issue, living situation, renter or homeowner.
12 Student living situations For the property tax refund- must pay property taxes on unit - may not receive a CRP if non-profit organizationDormitoryseparate cooking facilitybathing facility per unitStudent housingLiving off campusStudent housing – each unit sep. and pays RE taxesQualifying one – living off campus
13 Household income Line 1 - federal adjusted gross income 1040NR-EZ line 101040NR line 35Line 5 - must include income from all sources - taxable and non-taxable income included - write non-resident alien in box and also income typescholarships and fellowshipsincome excluded by a tax treatytuition paid by the University for the PhD student in exchange for TA dutyInterestSee page 9 of Property Tax BookletOther income on page 9 of PR booklet
14 Property Tax Return cont. Line 7 - Subtraction for dependents – See federal definition for qualifying child.(To determine amount see worksheet on page 10 of M1PR instruction booklet).Only Mexico and Canada can use for PR purposes if able to claim dependents on the 1040 NR.Just to make note that you will have to pay attention to these special situations for the PR return, otherwise there is no subtraction for dependents.Unique situations: Japanese, South Koreans, Mexicans, and Canadians are allowed dependent exemptions - Indian students with children who are residents or citizens - only Mexico and Canada can use for PR purposes.
15 Property Tax for Renters If two unmarried adults in a unit, CRP is split equally and apply for refund separatelyIf income is less than the rent paid, enclose an explanation of the source of funds used to pay the rent
16 SS# or ITIN Capital letters- Name/address x Living Status Federal adjustedgross incomeAdditionalNon-Taxableincome Line 5page 9 - M1PROther income not included in line 1 -Line 5 – include interest, scholarships and grants, or other income excluded by treaty. If you enter an amount on line 5 make sure to identify the source.
17 Signature on bottom of return STIN/site number in 9 boxes – don’t use IRS labelsSignature on bottom of return
18 For more information see Fact Sheet #16 Aliens at www.taxes.state.mn.us Questions????