State tax policy brought into conformity with federal code

Minnesota’s tax code has been updated to conform with most of the federal Internal Revenue Code that’d been updated by seven federal acts enacted between Dec. 20, 2019, and Dec. 15, 2022.

With the changes, Minnesota’s tax code is updated to reflect changes in the definitions of federal adjusted gross income or federal taxable income. The acts that inspired the conformity changes (with their date of enactment) are:

• Further Consolidated Appropriations Act (Dec. 20, 2019);

• Families First Coronavirus Response Act (March 18, 2020);

• Coronavirus Aid, Relief, and Economic Security Act (March 27, 2020);

• Consolidated Appropriations Act (Dec. 27, 2020);

• American Rescue Plan Act (March 11, 2021);

• Infrastructure Investment and Jobs Act (Nov. 15, 2021); and

• Inflation Reduction Act (Aug. 16, 2022).

The law largely conforms to the changes retroactively, meaning taxpayers affected by changes in previous tax years may file amended returns to account for the changes adopted.

The law does not conform state tax code to the Internal Revenue Code regarding 12 changes to federal policy in the areas of businesses losses and interest, payroll credits, changes in the dependent care credit and disaster-related casualty losses, and deductions for some tuition, charitable contributions and business meals.

Sponsored by Rep. Aisha Gomez (DFL-Mpls) and Sen. Ann Rest (DFL-New Hope), the law’s provisions are mostly effective Jan. 13, 2023, or whenever effective for federal purposes. Some retroactive provisions are instituted for tax years 2018 through 2021, and one change in net operating loss deduction becomes effective in tax year 2026.

HF31*/SF25/CH1

HF0031* / SF0025 / CH1