The Minnesota Direct Tax Rebate issued to eligible taxpayers in 2023 is taxable income on the federal tax return but not in the Minnesota tax return. Thus, it is entered as as subtraction on Schedule M1M and is also subtracted from household income on Form M1PR.
Federal Return (Form 1040)
In the federal return, enter the Form 1099-MISC in its menu. The income will be reported on Schedule 1 line 8 as Other Income.
Minnesota Return (Form M1 and M1PR)
Enter the the rebate as a subtraction on Schedule M1M. From the Minnesota Tax Return Menu select:
- Subtractions from Income
- Subtraction for one-time rebates for tax year 2021 included in Federal AGI - Enter the amount.
If the taxpayer is also filing Form M1PR, this amount will automatically be included as a subtraction from Total Household Income.
Additional Information: