MN Department of Revenue tax form error for 2019 and 2020
Recently Minnesota residents in the highest tax bracket have been receiving letters from the Department of revenue about taxes owed from 2019 and 2020. This was equally surprising for both tax preparers and taxpayers. The issue was caused by the MN Department of Revenue. So, despite tax preparers following the rules provided, taxpayers still owe this amount because the Department of Revenue provided the wrong information to the tax preparers.
In 2019, a change was made to the standard income tax deductions. Unfortunately, the MN Department of Revenue didn’t update its tax forms to reflect these changes. In short, the error was that standard deduction limitations were reduced by 20% when they should have been reduced by 80%. As a result, thousands of individuals in the highest tax bracket owe taxes from 2019 and 2020 despite following the forms provided by the department of revenue. In total, 38.4 million dollars will be collected from around 45,000 affected returns.
The error affects Taxpayers in the highest tax bracket. The AGI for affected taxpayers is different in 2019 and 2020. Also, the AGI for the highest tax bracket varies depending on your filing status (see chart below). The amount you owe will increase as your AGI increases above your respective limit. On average each return that was affected will owe about $850 but most taxpayers will owe far less than this amount.
The MN Department of Revenue is sending letters to affected taxpayers in April 2022. If you received this notice you have 60 days to pay the taxes you owe without receiving any penalties or interest charges.
Filing Status |
2019 |
2020 |
| Single | $276,000 | $280,534 |
| Married Filing Jointly | $357,334 | $363,200 |
| Qualifying Widower | $357,334 | $363,200 |
| Married Filing Separately | $178,675 | $181,609 |
| Head of household | $317,000 | $322,200 |
