Minnesota is providing unemployment benefits and PPP loans in 2020. So where is the money?
Minnesota finance officials have not said when or if they will automatically issue refunds on pandemic corporate loans and unemployment benefits.
ST. PAUL, Minn. (FOX 9) – It will take Minnesota weeks or months to refund taxes paid on unemployment benefits and COVID-19 pandemic-related business loans.
Approximately 500,000 Minnesotans are on the verge of getting their tax break back for the first $ 10,200 of 2020 unemployment benefit. More than 100,000 Minnesota companies have received Paycheck Protection Loans and are now waiting for a refund.
A month ago, Governor Tim Walz and top lawmakers agreed on the tax breaks. This agreement is in the special session of the Tax Omnibus Act, and the legislature expects to pass the measure before the end of June. However, Minnesota Department of Revenue officials say they are waiting for the bill to go into effect before deciding whether to automatically issue refunds or request revised returns.
House and Senate tax committee chairs said the agency needed to announce a decision quickly.
“When will this decision be made? It should be made soon,” said Carla Nelson, Senate Chairwoman for Taxation, R-Rochester, in an interview. “There’s nothing new here. The department has known what the law will be for a month.”
Minnesota is one of the few states where people have had to pay income taxes on 2020 unemployment benefits and companies have had to pay paycheck protection program loans. The federal government long ago waived unemployment benefits and PPP loans from federal income taxes.
The deal, closed on the last day of the regular meeting – which happened to be tax day – assured individual applicants and business owners that they would eventually get their money back. The only question back then was when.
A Treasury Department spokesman said the agency will wait for the bill to go into effect before updating and testing its systems to see if automatic refunds are possible.
“This system update and review is a process that the department performs annually as it implements a tax law change and can take from weeks to months, depending on the complexity and resources required to implement the changes,” said Ryan Brown. the agency’s spokesman. “Hundreds of thousands of Minnesota taxpayers were given unemployment insurance or PPP loan waivers in 2020, and it will take time for the department to adjust the tax returns as much as possible and to process the amended tax returns that taxpayers may have to file . “
The Treasury Department has set up a subscription website to receive email updates.
House Taxes Chairman Paul Marquart said he believed the agency could automatically issue refunds to most applicants except in the most complicated cases.
“I see where you have to wait to know what the tax bill will look like,” said Marquart, DFL-Dilworth, in an interview. “But I definitely hope it will be sooner rather than later and we will talk to the Commissioner about that.”
In addition to the tax breaks for PPP loans and unemployment benefits, Nelson and Marquart said the tax bill also includes:
- A tax credit for filmmakers making films in Minnesota of $ 5 million per year for four years
- The Minnesota Working Family Tax Credit is extended to 19- and 20-year-olds who either have dependents or do not have dependents
- A year-long continuation of the Minnesota Historic Preservation Tax Credit
- An extension of the commercial property exemption to the first $ 150,000 of value