In 2023, the Minnesota Direct Tax Rebate was issued to eligible taxpayers who for tax year 2021 resided in Minnesota for all or part of the year; filed Form M1 or M1PR by December 31, 2022; were not claimed as as a dependent on someone else's return; and had federal AGI less than or equal to $150,000 for married joint filers or $75,000 for all other filers.
The rebate amounts were $520 for married couples filing a joint return, $260 for all other individuals, plus $260 for each dependent claimed on the return (maximum three dependents). Thus the maximum rebate was $1,300.
This rebate is taxable for federal purposes. It is not taxable in Minnesota. Taxpayers who received the rebate will receive Form 1099-MISC from the Minnesota DOR.
2023 tax return entries
In the federal tax return (Form 1040), the Form 1099-MISC issued by the Minnesota DOR for the Direct Tax Rebate should be reported on Schedule 1 line 8 as Other Income.
In the Minnesota return, the rebate amount should be entered as a subtraction from income on Schedule M1M line 33. If the taxpayer is filing Form M1PR, the rebate should be subtracted from their household income on line 10.
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