If you received a Minnesota tax audit notice related to your 2019 or 2020 tax return, you may need to pay additional MN state taxes.

In April of 2022, an estimated 45,000 Minnesota taxpayers began receiving notices regarding an audit of their 2019 and/or 2020 tax returns by the Department of Revenue.

This update is specifically for taxpayers that filed 2019 or 2020 tax returns with the state of Minnesota; and were subject to the state’s highest tax bracket in either of those filing periods. Approximate thresholds: Single - $275,000 adj. gross income, Joint - $360,000 adj. gross income.

If you have received an audit notice in the mail from Minnesota related to this issue, we suggest reviewing and consulting with your tax preparer as payment may be required. It’s always best practice to save a copy of both the notice and proof of payment for your personal records.

Additional Information

The state of Minnesota’s standard tax forms and supporting worksheets used by all filers (professionals and self-preparers) contained a calculation error. In total, this error caused the state to under-collect $38.4 million between 2019 and 2020, as reported in the Star Tribune on May 13, 2022.

While admitting fault for the issue, Minnesota is now sending notices in the mail to taxpayers that owe additional taxes for 2019 and/or 2020, prompting payment without penalty or interest within 60 days of the notice date. Those affected will NOT have to file an amended return(s) -- the Department of Revenue will automatically adjust filings.

Contact your financial advisor or tax preparer with questions.

Source: Star Tribune - State error means wealthy Minnesotans owe more taxes.

V22154900