IRS Collects: 2023 Law Leads to Extra Tax Bill for Most Minnesotans

Washington, D.C (KROC-AM News)- The income tax filing season opened in Minnesota and across the country this week. 

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Taxpayers have until April 15 to complete their flings. That date is also the deadline to pay any owed federal and state taxes. 

Most Minnesotans will be shelling out extra cash to the Federal Government this year. That’s due to the tax law passed by state lawmakers and signed by Gov. Tim Walz in the 2023 legislative session. 

The law sent tax rebate checks to millions of Minnesotans last year. The Minnesota Department of Revenue says $1 billion was returned to 2.1 million Minnesota residents as a result of that law. 

In December the Internal Revenue Service (IRS) announced the rebate check recipients are required to pay income tax on the rebates. Gov. Tim Walz, Rep, Pete Stauber and other leaders implored the IRS to reconsider the decision but to no avail. 

In a letter sent to Stauber this week, IRS Commissioner Daniel I. Werfel said the payments were ineligible from federal tax exclusion due to the income thresholds set by the state law.

The law that triggered the payments also did not pass until after the Federal COVID-19 emergency ended, making them ineligible for disaster tax exemption, the letter says. 

Minnesotans with an individual income of $75,000 or less or a household income of $150,000 or less were eligible to receive the rebates, which ranged from as low as $260 to as high as $1,300 for households with three or more dependents. 

State officials say Minnesotans could pay between $26 and $286 depending on income and size of checks they received.

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