Minnesota allows the following subtractions from income on forms M1M and M1MB:
K-12 Education Expense Subtraction
See the Minnesota Instructions for full requirements and worksheet. $200 maximum for computer and educational software expenses. Overall limit of $1,625 per child grades K-6, $2,500 for grades 7-12.
Deduction for Age 65 or Older/Disabled
To qualify, the taxpayer or spouse must be born before January 2, 1957 OR were permanently and tonally disabled and received federally taxable disability income during the tax year.
Education Savings Account Contribution Subtraction
May be able to deduct certain contributions made to a 529 plan. Cannot take both the credit and the subtraction.
Social Security Benefit Subtraction
If you entered an amount on line 6b of federal Form 1040, complete the Worksheet for Line 12.
First-Time Homebuyer Savings Account Subtraction
You may be eligible to subtract the earnings on your first-time homebuyer savings account.
Active Duty Military pay
Subtraction for military pay for both residents and nonresidents of Minnesota that is included in federal taxable income.
Payment from the Minnesota Frontline Worker Pay Program (new for 2022)
If you received frontline worker pay, enter the amount that was included in your federal adjusted gross income.
Depreciation Subtraction (M1MB) 2020 only
If you reported 80% of the federal bonus depreciation as an addition to income on your 2013 through 2019 Minnesota return or you received a federal bonus depreciation subtraction in 2020 from an estate or trust, complete the worksheet in the M1M instructions to determine the amount to enter.
Certain Interest and/or Dividends on from U.S. Obligations
Federally taxed income received from US bills, bonds, savings bonds, notes, certificates of indebtedness, Sallie Mae bonds, dividends paid to mutual funds attributable to such bonds. Ginnie Mae, Fannie Mae, or Freddie Mac bonds are not included.
Indian Reservation Income
If you live and work on the reservation and you're a member of that tribe, enter your reservation sourced income that is taxable on the federal return. You must apportion any child and dependent care credit you claim based on your Minnesota taxable income.
Gain from the Farm Property Sale while you were insolvent (M1MB)
Deduct the gain the sale of farm property if:
- You operated and owned the farm
- Your debt, immediately before the sale, was greater than the fair market value of your assets
- The gain is included in your income on the federal return
- The proceeds of the sale were used to pay off the mortgage, contract or lien on the property
National Guard Reservists Compensation
Income received for training and state active service that is included in your federal income. See instructions for more details.
Section 179 Expensing Subtraction (M1MB)
If you added back 80% of the excess IRC section 179 deduction in any of the last five years, enter one-fifth of the add-back. (MS 290.0132subd. 14). Do not include an amount attributable to section 179 addition for property placed in service in a tax year beginning after December 31, 2019. Minnesota subtractions related to prior year additions will be allowed until the 5-year subtraction period ends.
Expenses Related to Organ Donation (up to $10,000)
If you, your spouse, or dependents donated (while still living) an organ (kidney, liver, lung, pancreas, intestine, or bone marrow) to another individual, you can subtract actual qualified expenses up to $10,000.
Subtraction for Prior Addback of Reacquisition of Indebtedness Income (M1MB)
Any discharge of indebtedness from reacquisition of business debt deferred in 2009 or 2010 and included in the prior year's Minnesota taxable income and included in the current year federal income
AmeriCorps National Service Program
Amount of post-service education award received and included in federal taxable income. If Student Loan Interest was claimed, reduce the subtraction amount by the interest attributed to the award.
Railroad Maintenance Expenses not allowed (M1MB)
If Form 8900 was used to claim a federal credit for railroad maintenance expenses, enter the 2022 amount you were not able to claim.
Military Pension or Other Retirement Military Pay
Military retirement pay that is taxed on your federal return and received for active duty service, reserve retirement pay, or survivor benefit.
Railroad Retirement Board Benefits (Tier I)
Unemployment, sick pay or retirement benefits from the Railroad retirement board that are included in federal taxable income.
Net Operating Loss - NOL (M1MB)
Enter amount you are carrying forward for Minnesota purposes for 2022. For complete information on how to determine line 13 and any amount to carry forward, visit the MN website.
Disallowed Section 280E Expenses for Medical Cannabis Manufacturers (M1MB)
If you are registered with the Minnesota department of Health as a medical cannabis manufacturer, you may subtract any expenses that were not allowed for federal purposes under section 280E.
Income From Prior Year Partnership Sale (M1MB)
Only complete this subtraction if both of the following are true:
- You filed a form M1AR in a prior year to report accelerated recognition of installment income from the sale of a partnership or S-corp.
- You recognized a gain on your 2020 federal return from the sale which was reported on form M1AR in the prior year.
Deferred Foreign Income Recognized Under Section 965 of the Internal Revenue Code (M1MB)
You may subtract the amount of deferred income that was recognized on your federal return under the IRC section 965. This amount should be the section 965(a) inclusion amount reduced by section 965(c).
Global Intangible Low-taxed Income Included Under Section 951A of the Internal Revenue Code (M1MB)
You may subtract any amount of global intangible low-taxed income that was included in your gross income for the year under section 951A of the IRC.
Volunteer mileage reimbursement subtraction*
If you received mileage reimbursement in volunteer service for an organization eligible for a charitable contribution under Internal Revenue Code section 170(c), you may subtract the amount you received which exceeded the 14 cent per mile volunteer mileage rate
Charitable Contributions over $500
You may subtract some of your contributions made during the year if both of the following are true:
• You did not file Schedule M1SA, Minnesota Itemized Deductions.
• You made charitable contributions of more than $500.
Amount of mortgage interest reported on the Federal Schedule A that is from equity loan interest.
Federal Adjustments Not Adopted by Minnesota
Adjustments to federal income due to reporting differences between Minnesota and the federal government.
For additional information, please refer to the Instructions on Form M1M