999_Tri-CAP 2014 tax.. - Tri

Basic C volunteer training
Tax year 2014
Topic 13: Minnesota updates
and other information
2014 updates in Minnesota
 Minnesota has accepted the federal
standard deduction for married taxpayers
 New nonrefundable Reading Credit
 Minnesota has accepted federal legislation –
Schedules M1SA, Itemized Deductions and
M1NC, Federal Adjustments – are no longer
MN and federal benefit
Income not taxed on
federal return used to
calculate refundable
MN credits
TaxWise transfers
nontaxable income
from 1040 to Minnesota
Other nontaxable
income must be
entered manually
Do not list on Minnesota
 IRA rollovers
 Food stamp payments
 Life insurance payments
 Property tax refunds
 Child support
 Inheritances
 Gifts
 SSA or SSI benefits paid to a
Additional Income Worksheet for
 Workers’ compensation
 Nontaxable contributions
to a retirement plan
 Employer paid
dependent care benefits
 Veteran’s benefits
 Nontaxable scholarship
 Reduction in rent
received for being a
 Nontaxable gain on the
sale of a home
 HSA deduction
 For homeowners –
amount of certain adults
living in the home
Topic 14: Minnesota Individual
Income Tax
Form M1, Individual Income Tax
 Federal information transferred to the
Minnesota returns by TaxWise:
– Filing status
– Wages (line A)
– IRA, pensions and annuities (line B)
– Unemployment (line C)
– Adjusted gross income (line D)
– Federal taxable income (line 1)
– State income tax refund (line 5)
Form M1, line 3: other
 Schedule M1, lines 3 and 4
Form M1, line 6: Other subtractions
 Schedule M1M, line 17: K-12 education subtraction
(enter directly on form)
 Must have qualifying expenses and qualifying child
 Max subtraction is $1,625 per child in grades K-6
 Max subtraction is $2,500 per child in graded 7 - 12
Form M1, line 6: Other subtractions
 Schedule M1M, line 18: Charitable contributions over
$500 for taxpayers not itemizing on their federal return
(transfers from Schedule A)
Form M1, line 6: Other subtractions
 Schedule M1M, line 22:
Railroad retirement income
taxed on the federal return
Form M1, line 6: Other subtractions
 Schedule M1M, line 24: American Indians living
and working on an Indian Reservation
 Schedule M1M, line 32: Post service education
awards from AmeriCorps program (enter
amount on form)
Form M1, Line 12:
Part-year residents and nonresidents
 Schedule M1NR
 Enter dates taxpayer lived in Minnesota on M1NR
 Enter income from all states in TaxWise
Form M1, line 16: marriage credit
 Schedule M1MA is calculated by TaxWise
 Must file married filing jointly
 Must have taxable income on line 8, Form M1
 Joint income at least $37,000
 Lesser-earning spouse must have least $22,000
Form M1, Payments
 Line 22: Minnesota income tax withheld
 Line 23: estimated income tax payments and amount applied
from 2013 return
Topic 15: Minnesota
Refundable Credits
Form M-1, Line 24: Child &
dependent care credit
 Schedule M1CD
 Household income
$39,000 or less and
has qualifying
 MFS does not qualify
Form M-1, Line 25:
Working family credit
 Refundable credit is twin to EITC
 Eligibility is same as EITC
 Part-year residents and nonresidents may also be eligible
Form M-1 Line 26: K-12 EDUCATION CREDIT
 Schedule M1ED
 Refundable credit of 75% of qualifying
 CANNOT claim a subtraction for the 25%
portion not allowed for the credit
 CANNOT claim both the credit and
subtraction for the same expenses
K-12 education credit &
 Not required to bring receipts to appointment, but
should have them at home
 No receipts – no credit
 Provide taxpayer with Minnesota Revenue K-12
education envelop to keep receipts for 2015
K-12 education credit rules
 Meet “household” income limits
 Qualifying child uses EITC definition
 Child must be in grades K-12 at a public, private or home school in
MN, IA, ND, SD or WI
 Expenses must be to improve or expand knowledge and skills in core
No income limit
a) Taxpayer’s child, adopted
child, stepchild, grandchild
or foster child
b) Lived with the taxpayer in
the U.S. for < ½ the year
Any filing status
Household income
a) Same as EITC
b) Lived with the
taxpayer in the U.S.
for < ½ the year
Cannot be MFS
$1,625/child (K-6)
$2,500/child (7-12)
$1,000 per child
K-12 credit & subtraction
eligible expenses
 Page 164 lists qualifying expenses and instructor
 Private school tuition qualifies for subtraction only
 M1ED, line 14: eligible to use $200 max for each the
subtraction and credit for computer software and
hardware expenses totaling $400 +
Form m1, line 27: READING
 Refundable credit with no income limit
 Available for tax year 2014 only
 Maximum credit is $2,000
 Eligibility requirements are multifaceted
Topic 16: Minnesota direct
deposit or amount owed
Form m1, lines 30 & 31: tax refund
1. Option 1: Deposit into the same checking
or savings account as federal
2. Option 2: Deposit into another financial
3. Option 3: Receive a paper check
4. Option 4: Apply all or a portion of the
refund toward 2015 estimated taxes
Form m1, line 32: amount owed
 Option 1: Direct debit from checking or savings
 Options 2: Pay electronically using Minnesota
Revenue’s e-Services
 Option 3: Pay by phone
 Option 4: Pay by check or money order
 Option 5: Pay be credit or debit card
10 minute break
Topic 17: Minnesota Homestead
Credit and Renter’s Property Tax
Housing status - homeowner
 Owned or lived in
their home on
 Needs Property Tax
Payable in 2015
Housing status – renter & homeowner
 Rented during 2014 & lived in their home on 1/2/15
 Complete both renter and homeowner sections
 Need CRP and Property Tax Statement Payable in 2015
Nursing home or adult foster care resident
 Received GAMC, Medicaid, SSI, MSA or GRH - use nursing home
or adult foster care resident housing status
 Did not receive public benefits, use renter housing status
Housing status – mobile homeowner
 Owned and lived in their mobile home on 1/2/15
 Rented the property the mobile home was located
 Need CRP and Property Tax Statement Payable in 2015
Married for the entire year
 Lived with spouse entire year – file together
 Lived apart from spouse for all or part of the year – file separately or
together; however income of the other spouse must be included for
any time they lived together
 One spouse lived in nursing home and other spouse lived elsewhere –
file separate returns
Married couple
 Married during the year – each spouse can file
separately or together; however if filing separately
include both incomes for the period in 2014 they lived
 Divorced or legally separated during the year – each
spouse must file separately and include both incomes
for the time they were married and lived together
Homestead credit refund
 Max refund is $2,620
 Household income <$107,150
 Own and occupy the home on January 2, 2015
 Property classified “Homestead”
 Does not owe delinquent property tax
 Taxpayer must have valid social security number (if married, at
least one must have SSN)
Special property tax refund
 Max refund is $1,000
 Owned and lived in the home on 1/2/14 and 1/2/15
 Property tax increased by more than 12% and the increase was $100
or more
 Complete Schedule 1, page 2 M1PR
 Taxpayer and another person (not spouse) own and occupy home
as co-owners – only 1 person can apply for refund and must include
the income of the other owner
 2+ people own the home, but not all live in the home – owner that
lives in the home qualifies and not required to add the other owner’s
income on return
 Special rules for people who own and live in a multi-family dwelling
Homeowner situations
 Sells home in 2014 and rents for the rest of the year – files as renter
 Rents and then buys a home in 2014 and lives in the home on
1/2/15 – file as renter and homeowner
 Home is foreclosed in 2014 – does not qualify as homeowner
Homeowner situations
 Part-year resident – enter total household income from all states
 Lives in co-op, considered a homeowner
 Someone other than a spouse lived with taxpayer – include
income of the other person, unless the person was a boarder,
renter, taxpayer’s dependents or their parents
Mobile homeowner
 Owns a mobile home but rents the lot – file as mobile
 Rents a mobile home and rents the lot – file as renter
 Property tax statements generally mailed in June –
Dakota County issues in March
 Give taxpayer the Homeowner + Renter Info handout
Renter’s property tax refund
 Max refund is $2,030
 Household income is less than $58,060
 Is not a dependent of someone else
 Resided in a rental unit subject to real estate taxes
 Paid all or part of rent from his or her own funds
Certificate of rent paid (crp)
 Landlords required by law to issue CRP by January 31
 If landlord refuses, give the Homeowner + Renter Info handout for
Rent Paid Affidavit information
 Minnesota Revenue will not issue Rent Paid Affidavit until after March
 More than 1 renter, each renter receives a CRP regardless of actual
amount paid by each renter
Renter situations
 A parent and an adult dependent child live together, landlord
issues 2 CRPs – parent can claim the amounts from both CRPs
 Taxpayer cannot claim rent for more than 12 months during the
tax year, but they rented two units during 2014 – include the rent
amount for the unit where they lived if overlapping months
 Part year residents – include household income received while
living in Minnesota
Renter alerts
 College dormitories and nonprofit nursing homes are exempt from
property taxes so do not qualify for renter’s refund
 Cannot claim refund if (a) nonresident alien, (b) gross income
<$3,950, and (c) received more than ½ their support from a relative
 Rent paid by a person or organization other than the taxpayer does
not qualify if the money was paid directly to the landlord
 If parent pays for child’s off-campus rent to attend school and the
child is a dependent, neither parent nor child qualify to claim the
renter’s refund
Schedule M1PR, page 1
 Line 2: Nontaxable Social Security and Railroad Retirement
 Line 3: Payments to retirement plans deducted as an adjustment to
income on Form 1040 is added back
 Line 4: nontaxable federal and state benefits
 Line 5: additional nontaxable income
Form m1pr, page 1
 Line 9: renters
 Line 11: homeowners
 Line 12: special property tax refund
Form M1PR, page 1:
e-file and direct deposit
If filing an M1PR
only, check this box
Form M1PR, page 2
 Schedule 1 – special homeowner refund
 Schedule 2 – subtractions to income
 65 or older or disabled
 Dependents
 Retirement account
 Page 180, certificate of rent paid
 Page 181, property tax statement for taxes payable in 2015
 Special situations for nursing home and adult foster care Contact
Tri-CAP office
 Complete Basic or Advanced certification test
 Consider viewing the health savings account training online
at the P+P volunteer site and certifying at the HSA level
 View the online TaxWise training before attending Basic D
to give you a head start

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