Start For Free

Fast, Secure, and Always Accurate!

Back to List

Category: Minnesota

Minnesota Military Filing Information

New for the 2014 Tax Year

Members of the Minnesota National Guard or other reserve component of the United States military who receive pay under Title 32 Active Guard Reserve may subtract that income from their taxable income on Schedule M1M, line 26. The subtraction is not allowed for compensation received for employment by the Minnesota Department of Military Affairs or the United States Public Health Service unless called to Active Duty under Title 10 pay.

 

Active Duty Military Pay Subtraction

Minnesota military members are allowed to subtract certain active-duty military pay from taxable income on their state return. This generally reduces the amount of income that is taxed by Minnesota.

This subtraction may be claimed by:

  • Members serving in the U.S. or U.N. armed forces who receive active-duty military pay that are subject to federal tax under U.S. Code Title 10.
  • Members of the Minnesota National Guard and Reserves, who receive taxable active-duty pay for services or compensation for training and meetings under U.S. Code Title 10 and Title 32, such as ADSW (ADOS), natural disaster emergency response and missing persons searches, and reenlistment bonuses.

 

Filing requirements

If you are a resident, you must file a Minnesota return unless:

 

Residency

If you were a Minnesota resident before enlisting in military service, you remain a resident, regardless of where you are stationed. For details, see Residency of Active-Duty Military Personnel.

If you were a resident of another state when you enlisted, you remain a resident of that state unless you take steps to change your legal residence (or “domicile”) to Minnesota. For details, see Residency of Active-Duty Military Personnel.

If you are not a resident, Minnesota will not tax your military pay or your spouse’s wages (in most cases). You are not required to file a Minnesota return unless you have other income that is taxable in Minnesota and exceeds the state minimum filing requirement. If you file a Minnesota return, use Form M1NR (non resident return) and complete the Additions to Income and Subtractions from Income sections. Some income may be taxable. Minnesota does tax income from other sources, such as nonmilitary wages you receive or gambling winnings in the state.

If you are a member of the Minnesota National Guard and Reserves

You may subtract military pay for:

  • state or federal active service for natural disaster emergency response, missing person searches, and airport security duty; and
  • National Guard and Reserves duties, annual training and drill weekends. (For National Guard members, this includes training and meetings outside of Minnesota as well as within Minnesota.)

To claim the subtraction:

If you are an active member of the U.S. or U.N. Armed Forces

You may subtract military pay for active service. To claim the subtraction:

 

Did You Serve in a Combat Zone at Any Time During 2014?

If so, you may be eligible for a credit of $120 for each month or part of a month you served in a combat zone or hazardous duty area and Minnesota was your home of record. You can also claim this credit for months served in years 2011, 2012, and 2013. To claim the credit, complete Form M99, Credit for Military Service in a Combat Zone and mail it to the department with the appropriate military records. To download Form M99, go to the Minnesota website. To determine if you qualify, please Click Here.

 

Military Pensions

Military pensions of Minnesota residents are taxable by Minnesota. Therefore:

• if you move into Minnesota, your pension becomes taxable once you become a Minnesota resident, even if the pension was earned prior to moving to Minnesota.

• if you move out of Minnesota and establish a new state of domicile, your pension is not taxed by Minnesota.

 

Extensions

If you are an active duty military personnel in a presidentially designated combat zone or contingency operation, you may file and pay your Minnesota income taxes up to 180 days after the last day you are in the combat zone or the last day of any continuous hospitalization for injuries sustained while serving in the combat zone. When you file your Minnesota income tax return, clearly state that you were serving in a combat zone.

If you are stationed outside the United States but are not involved in combat zone operations, you have until October 15 to file your return. However, to avoid a late payment penalty, you must pay at least 90 percent of your total tax by April 15. Penalty and interest will be assessed on any tax not paid by the regular due date. Unlike the federal rules, Minnesota does not allow an extension to pay your tax.

 

For more information about Minnesota and the Military, please visit the Minnesota website.