Minnesota Payments Section Overview

When you file your Minnesota income tax return, the information in the Payments section helps determine whether you'll receive a refund or owe additional tax. Minnesota combines your withholding, estimated tax payments, extension payments, refundable credits, and any prior-year refund carryforward to calculate your final tax balance. These amounts are reported on Form M1.

Program Entry

To access the Minnesota Payments section in the software:

1. Select State
2. Three dots to Edit the Minnesota return
3. Select Payments

Apply Part of Your Refund to Next Year's Estimated Tax

If you're receiving a Minnesota refund, you can choose to apply all or part of that refund to your 2027 Minnesota estimated tax instead of receiving the entire amount now.

Minnesota reports:

• The portion refunded directly to you on Form M1, Line 29.
• The portion applied to your 2027 estimated tax on Form M1, Line 30.

Keep in mind:

• The total of Lines 29 and 30 must equal your refund amount on Form M1, Line 24.
• Once you elect to apply a refund to next year's estimated tax, the election generally cannot be changed.
• If you enter an amount greater than your available refund, or your return shows a balance due, the carryforward amount won't transfer to your Minnesota return.

Other Minnesota Income Tax Withheld

Minnesota withholding is tax already paid during the year through wages or other income sources. Common sources include:

• Form W-2
• Forms 1099
• Form W-2G
• Form 1042-S
• Minnesota Schedule KPI, KS, or KF withholding reported from partnerships, S corporations, estates, or trusts

Only enter withholding that has not already been reported through previously entered income documents.

Minnesota withholding is reported on Schedule M1W, Minnesota Income Tax Withheld, and the total flows to Form M1, Line 20. Taxpayers claiming Minnesota withholding must include Schedule M1W when filing their return. 

Minnesota Estimated Tax and Extension Payments

Enter any qualifying Minnesota payments made during the tax year, including:

• 2026 Minnesota estimated tax payments made during 2026 or 2027
• A 2025 Minnesota refund that was applied to 2026 estimated taxes
• Extension or tax payments made by the original filing due date when filing after the deadline

These payments are reported on Form M1, Line 21. 

Total Payments

Your total Minnesota payments are combined on Form M1, Line 23 and may include:

• Minnesota withholding from Form M1, Line 20
• Minnesota estimated tax and extension payments from Form M1, Line 21
• Refundable credits reported through Schedule M1REF and carried to Form M1, Line 22

Refund or Amount Owed

After Minnesota compares your total payments to your tax liability:

• If total payments are greater than your tax, your refund is calculated on Form M1, Line 24.
• If your tax exceeds your total payments, the amount due is calculated on Form M1, Line 26. 

If you owe tax, Minnesota may also assess an underpayment penalty if the balance due is $500 or more and required estimated payments were not made on time. This penalty is calculated on Schedule M15.