Minnesota tax changes were signed into law on July 1, 2021. These changes are related to unemployment compensation, Paycheck Protection Program (PPP) loan forgiveness, and other retroactive provisions affecting tax years 2017 through 2020.
To help folks navigate these changes, the Minnesota Department of Revenue (DOR) updated Minnesota tax forms for tax year 2020.
If you filed a 2020 income tax return that included unemployment compensation or PPP loan forgiveness, DOR will either adjust the return or will ask you to amend it.
If DOR can adjust the return, they will send you a letter describing what they changed and any refund you may receive as a result. DOR says that they are committed to adjusting as many returns as they can.
If you will need to amend solely due to Minnesota tax law changes, wait until you hear from DOR before filing. DOR will let you know whether they will adjust your return or if you will need to amend it.
If you have not yet filed a 2020 return or filed for an extension, you may file using the updated forms to claim the recently passed unemployment and PPP loan forgiveness income exclusions and deductions.
DOR will continue to review Minnesota forms for tax years 2017 – 2019 and will provide updates as they are available.
Minnesota is the only state in the nation with a divided legislature as Republicans control the Senate and Democrats control the House. During the 2021 legislative session, divided government led to an increase in overall spending, but many of the harmful policy proposals from Governor Walz and the Democrat majority in the House were stopped from becoming law thanks to Republicans in the House and Senate.
Omnibus Finance Bills: Despite defeating many of the worst policy proposals, I nevertheless voted against most omnibus finance bills. This was largely due to unfunded mandates and what I considered to be an unreasonable increase in spending. There were three bills that I voted for, Transportation, Education, and Agriculture because they were the most bipartisan of the finance bills.
State Spending: The two-year budget approved and signed into law by Governor Walz totaled $52 billion—an 8% increase from the budget that was passed in 2019. Minnesota state government is also set to receive nearly $2.9 billion in COVID-19 relief dollars from the federal government. This increase in spending is unsustainable and a reminder that legislators must commit to rein in spending.
No Tax Increases: Despite a $4 billion surplus, Democrats pushed for billions in tax hikes that would have made life more expensive for Minnesota families of all income levels. Republicans stood strong and stopped all Democrat tax hikes, and helped deliver tax relief to businesses and unemployed Minnesotans.
Ending Emergency Powers: House Republicans fought all session long, voting more than 20 times to end the Governor’s emergency powers. The legislature finally voted to end the peacetime emergency during special session. House Republicans will fight to limit the Walz administration’s power and make permanent reforms to Chapter 12 to make sure we strike the proper balance between the legislative and executive branch.
Standing Up for Law Enforcement: Republicans successfully defeated numerous anti-police measures that would have made it harder for law enforcement to do their jobs and keep our communities safe. We’re proud to stand with law enforcement, and stand up against the “defund the police” voices in the Democrat party who demonize the entire law enforcement profession.
Safety in our Cities: Crime in the Metro area is skyrocketing as a result of Democrat leadership that is more focused on villainizing law enforcement than tackling the spike in murders, carjackings, and other crimes. House Republicans have the backs of our law enforcement and will keep bringing forward solutions to hold criminals accountable and bring safety back to our communities.
The legislature will return to St. Paul sometime in September to allocate $250 million in federal COVID relief dollars to frontline workers as bonuses.
Please be sure to reach out to me if you have any questions or concerns. I can be reached by phone at 651-296-6746 or via email at [email protected].