TAX LAW CHANGE CONFERENCE CALL JUNE 27, 2014 10:30 A.M.

TAX LAW CHANGE CONFERENCE CALL JUNE 27, 2014 10:30 A.M.

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Agenda March 21, 2014 tax law changes Renter property tax refund increase Homestead credit refund increase Supplemental agricultural credit for taxes payable in 2014 Tax relief for those affected by severe weather and flooding Q and A

2013 Middle Class Tax Cuts Update March 21, 2014 law matched Minnesota s tax code to the federal tax code About 1.1 million income tax returns filed after April 2 were filed with the new tax law changes We reviewed 280,000 returns that we received before April 2. When we reviewed the tax returns, 1 of 3 things happened: 1. We adjusted the return, if possible, and sent you a letter explaining the adjustment and sent you a refund. 2. We requested more information from you, adjusted the tax return if possible, and issued a refund, if due. 3. If we could not adjust the tax return, we notified you that you needed to file an amended return to get the benefits of the 2013 tax law changes.

Key date: June 27 June 27 We have completed our review of income tax returns affected by the March tax law changes If you have not heard from us by now, we do not believe your return was affected by the changes If you haven't heard from us but think you are affected, call us at: 651-296-3781 or email at: individual.incometax@state.mn.us

Increases in renter s property tax refund For renter property tax returns based on rent paid in 2013, there is a 6% increase to the refund. Last year This year with new law Maximum refund $1,600 $2,120 Average refund $592 $643 # of eligible Minnesotans 317,000 350,000* Who qualifies? Renters qualify for a property tax refund if their total household income for 2013 is less than $57,170

Increases in renter s property tax refund What do you need to do? 1. File NOW using Minnesota Department of Revenue Form M1PR. 2. You can file electronically through a tax preparer, using tax preparation software (fees may apply), or by mailing a paper Form M1PR to the Department of Revenue 3. Get the maximum refund by using the correct income when calculating household income. 4. Refer to the UPDATED property tax refund instruction booklet on our website for more information about filing.

Increases in renter s property tax refund When will I get my refund? 60 days after you file, or by mid-august, whichever is later We will begin releasing refunds on July 15, 2014 How much money will I get? The maximum refund is $2,120

Increases in homeowners property tax refund For regular homestead credits, there is a 3% increase to the refund based on taxes payable in 2014 Last year This year with new law Maximum refund $2,530 $2,657 Average refund $813 $837 # of eligible Minnesotans 380,000 500,000* Who qualifies? Homeowners qualify for a property tax refund if their total household income for 2013 is less than $105,500.

Increases in homeowners property tax refund How to file? File electronically for FREE through our website File electronically through a tax preparer or using tax preparation software (fees may apply) Mail a paper Form M1PR to the Department of Revenue Refer to the UPDATED property tax refund instruction booklet on our website for more filing information

Increases in homeowners property tax refund When do I need to file? You can file now. You should use the correct income when calculating household income to ensure you get the maximum refund you are entitled to. When will I get my refund? 60 days after you file or by Sept. 30, whichever is later. How much money will I get? The maximum refund is $2,657.

Important notes for homeowners and renters Software updated on June 4 to reflect refund increases If you filed your 2013 property tax refund before June 4 OR filed a paper form M1PR with the old credit tables, we will: Review the return Increase the refund by the appropriate percentage Send a letter explaining the increase and new refund amount

Important notes for homeowners and renters If your household income was affected by the March 21 tax law changes AND You filed a property tax refund before April 2 THEN You will need to amend your property tax return to receive the benefits of the March 21 law changes

Important notes for homeowners and renters Homeowners or renters whose household income was affected by the March 21 tax law changes that have NOT yet filed their property taxes should make sure to use their new income when calculating household income. This ensures they get the maximum refund they re entitled to.

Homestead Credit Refund Notification A 2013 law requires us to notify taxpayers who MAY qualify for a homestead credit refund but have not filed for one in the last two years. If you have not filed for a homestead credit refund in the last two years, we ll review your 2013 individual income tax information and estimate your potential 2013 refund. If the estimated refund is at least $1,000, we will send a letter letting you know you may qualify for a 2013 refund.

Supplemental Agricultural Credit Who: Farmers who received the Agricultural Homestead Market Value Credit in payable 2014 and who do not owe any delinquent property taxes. We expect about 94,000 farmers will qualify. Credit amount: The lesser of $205 or the net property taxes on the property, excluding the house, garage, and surrounding one acre of land Taxpayers: Do not need to do anything. We anticipate sending checks between Oct. 1-15, 2014

Supplemental Agricultural Credit What else do I need to know? You must pay the amount on your 2014 property tax statement by November 15, 2014. Keep letters you receive from us for your records. If you itemize deductions on your 2014 federal income tax return, you will need to reduce your real estate tax deduction by the amount of this refund. The new law also increased the agricultural homestead credit for 2015 and beyond. You will see this on your property tax statements for future years, if you continue to qualify for the agricultural homestead credit

Supplemental Agricultural Credit Contact your county auditor with questions For questions on which parcels qualify or how your refund was calculated, contact your county auditor. The Department of Revenue does not have this information. A list of county auditor names and contact information is on our website.

Disaster Relief June 19 Gov. Dayton declared a state of emergency for 35 counties in Minnesota affected by severe weather and flooding. He extended the emergency to July 22, 2014. If you were affected by the severe weather or flooding and have returns or taxes due between June 11 and July 22, contact us and we will waive any penalties and interest for this period. Call our Disaster Relief Hotline: 651-556-3016 Toll free (outside the metro only) 1-800-657-3606

Recap We completed the review of tax returns affected by middle class tax cuts. If you have not heard from us by TODAY, we believe that you were not affected by the 2013 middle class tax cuts. Property Tax Refunds Please file now. There are property tax refund increases for homeowners and renters, and an additional agricultural homestead credit for farmers. Taxpayers affected by the severe weather they can contact us and have penalties and interest waived for taxes due between June 11 and July 22.

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