Rep. Kim Norton Update: Tax Cuts, Filing Info, & MNsure Sign-up Events

Dear neighbors,

I wanted to take a moment to inform you about some important tax filing updates that are a result of tax cut legislation that was passed last week by the Minnesota Legislature.  You’ll see that so much has happened in the last week that my video update is already a little outdated, since we were still waiting for the tax bill to come to us from the Senate at the time it was recorded.  There is also important information about filing your taxes below the video link.

Tax cuts for Minnesota families

Last week, the House overwhelmingly voted to pass a tax cut bill (HF 1777) that provides $443 million in tax relief for middle class families and businesses.  We had done the work for this tax bill early in the House, but had been waiting for a similar bill to be passed by the Senate.  That work was completed with Governor Dayton’s signature on Friday.

The bulk of these tax savings come from federal tax conformity, by aligning Minnesota’s tax law with the annual changes made to the federal tax code.  This conformity to federal tax law will save middle class Minnesotans $230 million in income taxes, including:

• 650,000 middle-class married families will see $111 million in tax cuts.  An average married taxpayer earning less than $75,000 will see a $115 tax cut (this tax cut begins next year). 
• 330,000 moderate-income working families will see $66 million in tax cuts.  The average family earning less than $49,000 will see a $146 tax cut (a portion of this tax cut begins next year).
• 125,000 taxpayers paying down student loans will see a $50 tax cut on average.
• 80,000 new homeowners paying down mortgage interest will see an average tax cut of $60.
• 60,000 teachers will see a tax deduction for their classroom expense costs.
• 26,000 Minnesotans paying for childcare with incomes below $38,000 will see an $80 tax cut (this tax cut year begins next year).
• 30,000 college students and families paying college expenses will see an average $125 tax cut.
• $400,000 in tax relief is provided for families who receive employer-provided adoption assistance.  (This was a bill I authored to be included as a portion of the tax cut bill.)
• $7.2 million for homeowners who had mortgage debt forgiven (e.g., due to a foreclosure, short sale, or refinance).

In addition, HF 1777 repealed three business-to-business taxes:

• The sales tax on storage and warehousing services
• The sales tax on repair labor for commercial and industrial equipment (including farm equipment) and electronic and precision equipment
• The sales tax on telecommunications equipment

The new law also contains $33 million in tax credits, continues the Angel Investment Credit for start-up businesses and entrepreneurs, and repeals the gift tax and increases the estate tax exemption from $1 million to $2 million over five years and simplifies it by making it a stand-alone tax.  The new bill also helps improve the state budget reserves by depositing $150 million in reserves.

Important Tax Filing Information

Because this tax relief package was passed before April 15^th, the Minnesota Department of Revenue is working hard to make these tax cuts available to Minnesotans who have not yet filed their 2013 tax returns.  The Department of Revenue will update all of their internal and online systems by April 3, 2014.  They will also be working closely with online vendors who process returns to make sure that their software is updated to correctly process returns for potentially increased tax refunds.

If you have not yet filed your 2013 taxes, you should wait until after April 3, 2014 to do so.

• The Department of Revenue will have their online systems updated by then to account for tax refund changes. 
• You can keep updated with changes at the Department of Revenue’s website by clicking on the orange button at the bottom of their home page:

If you have already filed your 2013 taxes, you don’t need to do anything right now. 

• The Department of Revenue will be mailing refunds as usual and then reviewing returns that they received before the changes went into effect. 
• They will be doing this review after the April 15^th tax

      deadline and then sending out any refund increase by whatever means you elected to receive your refund.

• If you are eligible for an increased refund, the Department of Revenue will be able to make the necessary changes to your return with the tax documents you provided.  If they are unable to do so, they will individually contact you by postal mail to request necessary documents to amend your return.  

The Department of Revenue will also be communicating all tax refund changes and updates to CPA’s and tax preparers around the state.

Health Insurance deadline is March 31^st

Finally, if you have not yet begun the process of getting a health insurance plan through MNsure, I want to let you know about two two MNsure enrollment events to be held at Rochester Public Library on Saturday, March 29, from 9:30am-5:30pm and Sun, March 30, from 1:30-5:30pm.  It is important to have begun the process by March 31^st if you plan on signing up for a private insurance plan.  March 31st is the federal deadline requirement for every American to be signed up for an insurance plan.   Be sure to bring along:

• Your Social Security information
• Details about your expected 2014 household income
• Information about all other health insurance you might currently have. 

There will be MNsure navigators there to help assist you in-person.  You can call Denise Robertson with questions at 507-216-1266 or denise@healthaccess.mn  

It’s such an honor to represent you in St. Paul, and I appreciate hearing from you on any legislative issue.  Please contact me at rep.kim.norton@house.mn or 651-296-9249.

Sincerely,

Kim Norton

State Representative