Earlier this month Minnesota Department of Revenue announced that the processing of returns impacted by tax law changes made to the treatment of Unemployment Insurance compensation and Paycheck Protection Program loan forgiveness will begin the week of September 13.
“We know these refunds are important to those taxpayers who have experienced hardships over the last year and a half,” said Revenue Commissioner Robert Doty. “We made the decision to adjust nearly all of these returns on our end so that impacted taxpayers would not need to take the time and resources to file an amended return, which would further delay the refund they’re due.”
Revenue and MNIT staff have been working through the summer and early fall to update 2020 tax forms to reflect the law changes made in July, develop and build a system that is able to adjust over 540,000 impacted returns, and test that system to ensure the correct refund is issued, including additional benefits that may be due because of the reduced amount of taxable income.
Revenue will begin manually processing about 1,000 individual income tax returns per week to start. The number of returns processed per week will increase as system testing advances and more returns are able to be processed through the system, with a goal of processing 50,000 returns per week by late October.
“The Department of Revenue issues more than 2.9 million income and property tax refunds every year. We have a process in place, and we are following that process. With taxpayer dollars at stake, we must always find the balance between speed and accuracy,” Commissioner Doty said.
Each time changes are made to Minnesota’s tax laws, development is needed to the state’s tax management system to reflect those changes. Changes to one area of Minnesota’s tax laws often impact many other areas, as is the case here. Because of that, once the new components of the system are fully built, it is run through a series of tests to ensure those changes don’t compromise other areas of a taxpayer’s return. This is the same process the department uses each year when making changes to the tax system for the upcoming tax year.
Over 2,000 returns impacted by Paycheck Protection Program changes filed at the corporate entity level have started to receive refunds. These will continue to go out through September. These returns make up a small fraction of the total amount of impacted returns, do not require system development and testing, and are processed manually.
Letters were sent in mid-August to less than 8,000 individual income taxpayers who will need to file amended returns to get the benefits. If you have received one of those letters or have any questions on how this may affect you contact us today.