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Granite Falls Advocate Tribune - Granite Falls, MN
  • Tax conformity adds clarity and simplicity

  • This week we are taking up the Tax Conformity bill before the full chamber of the House of Representatives. This will likely be the first bill that we pass as a chamber and it will help people across Minnesota as they begin to file their taxes. This is the kind of common sense legislation that Minnesotans expect us to work to...
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  •     This week we are taking up the Tax Conformity bill before the full chamber of the House of Representatives. This will likely be the first bill that we pass as a chamber and it will help people across Minnesota as they begin to file their taxes. This is the kind of common sense legislation that Minnesotans expect us to work towards in the Legislature. Here is some useful information to help you understand what Tax Conformity is and why it exists.
        Federal Tax Conformity adds clarity and simplicity to Minnesota’s tax system by conforming to federal tax changes made in 2012. These changes will result in tax relief for middle class Minnesotans, including 55,000 teachers, 90,000 homeowners, 60,000 students and 32,000 small business owners. The fiscal impact of federal conformity for the state is $18.5 million for FY 2013.
        Congress’ late enactment of the American Taxpayer Relief Act of 2012 has created potential problems for Minnesota taxpayers who qualify for the tax year 2012 federal changes and want to file their Minnesota taxes. The problem is that the new federal tax changes allow deductions that are not currently allowed under Minnesota’s tax system. This creates confusion for taxpayers trying to file their 2012 taxes.
         If Minnesota does not conform with the new federal changes, each taxpayer who claims any of the affected deductions will need to file a special form to calculate their Minnesota income tax liability. These taxpayers will need to “add back” the federal deductions and include that amount in their Minnesota income tax liability.
         If Minnesota does conform to the new changes, then Minnesotans would likely not need to change forms and taxpayers could file without making additional adjustments.
    Some facts:
         Over 250,000 tax returns will be affected and include:
         •55,000 teachers who claim the $250 educator expense deduction
        •90,000 homeowners who claim an itemized deduction for mortgage insurance premiums
        •60,000 students or parents of students who take up to $4,000 for the higher education tuition and fee deduction
        •32,000 small business owners who quality for Section 179 expensing
        •Unknown amount of seniors who would need to recalculate the amount of social security benefits that would be taxable in Minnesota, which would exceed the amount taxed federally because they would not qualify for the IRA distributions to public charities if age 70 ½ or older.
        Throughout the legislative session, I encourage all constituents to contact me directly with any questions, comments, or concerns on any legislative issue. I can be reached by phone at (651) 296-4228, (888) 682-1388 or by email at rep.andrew.falk@house.mn. 
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