ST. PAUL, Minn. (KMSP) - The state of Minnesota is already setting up a big rule that may help a lot of taxpayers.
The new rule allows you to still claim all of the deductions made in the past regardless of how you file your federal tax return.
It’s meant to help you get the best possible break for taxpayers who will have to navigate two different tax codes.
The challenge for both taxpayers and the state comes after Governor Mark Dayton vetoed the tax bill this spring.
The bill would have closely aligned the state tax code to the new federal tax cut law that eliminates most itemized deductions in exchange for a higher standard deduction.
The new ruling by the Minnesota Department of Revenue allows state residents to claim either itemized deductions or the state standard deductions regardless of how they file their federal return.
The state standard deduction is $13,000 for married couples filing jointly or $6,500 for single filers.
House Tax Chairman Greg Davids says it’s a temporary fix.
“Well, that will help a lot of middle class Minnesotans because they were going to have a pretty good size tax increases had the department not done this,” Davids said. "I find it ironic, however, this was all going to be done in the tax bill that the Governor vetoed in May. And, so we had taken care of all of this plus more. But this is a very positive development and I certainly support their actions, in fact, I was hoping and suggesting that they did what they did.”
The new rule gives Minnesota taxpayers options, but in all likelihood, the legislature will try to repass a new tax bill as soon as January.
“This is a step forward. It’s been something I’ve suggested we need to do all along, and hopefully we can go some steps further in early January for whoever is elected back into the legislature. I think it needs to be taken care of immediately,” Davids said.
The new ruling by the Department of Revenue only applies to the election claim of standard deductions or itemized deductions on their state taxes and does not apply to any other elections a person makes on their federal tax forms.