How does it work in TaxSlayer? Inside the Subtractions from Income menu at the bottom, preparers will answer the below question YES or NO. Based on the selection, the program will automatically calculate the appropriate subtraction for the return. If any adjustments are needed, MN has indicated those adjustments will occur on their end after the return has been e-filed and accepted. Prior behavior for this subtraction allowed the preparer to manually enter the appropriate subtraction value in the return. This manual entry resulted in erroneous MN Reject Code 0628: “Severity: ErrorM1M line 29 must not be more than 488 for single, HOH or MFS, and no more than 976 for MFJ. Xpath: M1M Line 29: ReturnState/ReturnDataState/SchM1M/FrontLineWorkerPayAmt“.
Due to the reject code being issued, the entry behavior was updated to be an automatic calculation instead.
Frontline Worker Pay was signed into law on April 29, 2022. Over 1 million Minnesota workers qualified for the $487.45 payment. Federal Forms 1099 were not issued for these payments. The Minnesota Department of Revenue discovered that taxpayers reported this payment incorrectly on 97% of current tax returns filed. As a reminder, this payment is federally taxable and must be reported on line 8 of a taxpayer’s federal Schedule 1 (Form 1040).
The payment is not taxable for Minnesota returns. If the payment is:
- Reported on line 8 of Schedule 1, also enter this amount on these lines:
- Line 29 of Schedule M1M, Income Additions and Subtractions
- Line 10 of Form M1PR, Homestead Credit Refund (for Homeowners) and Renter’s Property Tax Refund
- Line 5b of Schedule M1ED, K-12 Education Credit
- Not reported on line 8 of Schedule 1, do not include the payment on the lines above.
Entering Frontline Worker Pay properly on both the federal and Minnesota returns will ensure Minnesota adjusted gross income is calculated correctly.
