Minnesota seems to be dragging their feet when it comes to conformity with federal changes this tax season. As a result, a number of returns are sitting in limbo while waiting for the Legislature to address variants such as unemployment and paycheck protection program (PPP) loans.
Per information provided by Berger Financial Group, tax deadlines for individual filings have been extended to May 17, but the deadline for trust tax returns and 2021 first quarter estimated tax returns has not been extended and remains April 15. This poses a challenge as tax preparers may not receive a client’s tax information until after the April 15 deadline, which potentially means they will be required to use 2019’s number to estimate 2021 tax payments.
Additionally, changes to PPP loan
forgiveness and unemployment benefits were made after tax filings were submitted and accepted/processed by the IRS. These add-backs on the federal return require consideration when filing Minnesota returns. The addition of economic impact payments on taxes are also being considered.
To top it all off, tax preparation software platforms have been slow to update the new changes made at both the federal and state levels, leaving tax preparers with the daunting task of navigating this tax season.