Agenda - Council - 02/08/2021 - Laserfiche WebLink

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01/13/21 REVISOR EAP/HR 21-01750 8.1 allocated or apportioned to Minnesota, is entitled to a credit for the tax paid to another state 8.2 if the tax is actually paid in the taxable year or a subsequent taxable year. A taxpayer who 8.3 is a resident of this state pursuant to section 290.01, subdivision 7, paragraph (b), and who 8.4 is subject to income tax as a resident in the state of the individual's domicile is not allowed 8.5 this credit unless the state of domicile does not allow a similar credit. 8.6 (b) For an individual, estate, or trust, the credit is determined by multiplying the tax 8.7 payable under this chapter by the ratio derived by dividing the income subject to tax in the 8.8 other state that is also subject to tax in Minnesota while a resident of Minnesota by the 8.9 taxpayer's federal adjusted gross income, as defined in section 62 of the Internal Revenue 8.10 Code, modified by the addition required by section 290.0131, subdivision 2, and the 8.11 subtraction allowed by section 290.0132, subdivision 2, to the extent the income is allocated 8.12 or assigned to Minnesota under sections 290.081 and 290.17. 8.13 (c) If the taxpayer is an athletic team that apportions all of its income under section 8.14 290.17, subdivision 5, the credit is determined by multiplying the tax payable under this 8.15 chapter by the ratio derived from dividing the total net income subject to tax in the other 8.16 state by the taxpayer's Minnesota taxable income. 8.17 (d)(1) The credit determined under paragraph (b) or (c) shall not exceed the amount of 8.18 tax so paid to the other state on the gross income earned within the other state subject to 8.19 tax under this chapter; and 8.20 (2) the allowance of the credit does not reduce the taxes paid under this chapter to an 8.21 amount less than what would be assessed if the gross income earned within the other state 8.22 were excluded from taxable net income. 8.23 (e) In the case of the tax assessed on a lump -sum distribution under section 290.032, the 8.24 credit allowed under paragraph (a) is the tax assessed by the other state on the lump -sum 8.25 distribution that is also subject to tax under section 290.032, and shall not exceed the tax 8.26 assessed under section 290.032. To the extent the total lump -sum distribution defined in 8.27 section 290.032, subdivision 1, includes lump -sum distributions received in prior years or 8.28 is all or in part an annuity contract, the reduction to the tax on the lump -sum distribution 8.29 allowed under section 290.032, subdivision 2, includes tax paid to another state that is 8.30 properly apportioned to that distribution. 8.31 (f) If a Minnesota resident reported an item of income to Minnesota and is assessed tax 8.32 in such other state on that same income after the Minnesota statute of limitations has expired, 8.33 the taxpayer shall receive a credit for that year under paragraph (a), notwithstanding any 8.34 statute of limitations to the contrary. The claim for the credit must be submitted within one Sec. 9. 8