If you previously claimed a Minnesota subtraction for a First-Time Homebuyer Savings Account, you may need to add money back to your Minnesota taxable income if the account was not used as required. Minnesota uses Schedule M1HOME to determine whether you have an addition and any additional tax.
When Do I Need to Report an Addition?
You may need to report an addition to Minnesota taxable income if either of the following applies:
- You previously claimed a First-Time Homebuyer Savings Account Subtraction, and money was withdrawn from the account for something other than eligible first-time homebuyer costs.
- The account balance is more than the total contributions at the end of the 10th year the account has been open.
How Is the Addition Calculated?
Complete Schedule M1HOME to determine the amount that must be added back to income. If Schedule M1HOME shows an addition, the amount is reported on Schedule M1M, Line 5. With the program you are able to enter information for up to two savings accounts.
Is There an Additional Tax?
Yes. If you have a First-Time Homebuyer Savings Account addition, Minnesota also requires an additional tax. Schedule M1HOME calculates the additional tax by multiplying the addition by 10%, and the amount is reported on Form M1, Line 14.
Program Entry
- State
- Edit Minnesota using the three dots
- Additions to Income
- First-Time Homebuyer Savings Account Addition
Additional Information
What type of income needs to be added to my Minnesota return?