SF1942

Purpose

This bill changes Minnesota’s estate tax rules to align with the federal estate tax framework. It requires Minnesota estate tax filings for certain estates with Minnesota-related property and uses federal definitions for calculating when a return is needed.

Main Provisions

• Adds a requirement that a Minnesota estate tax return must be filed if:
  • a federal estate tax return is required to be filed, or
  • the sum of the federal gross estate and federal adjusted taxable gifts (as defined in Internal Revenue Code section 2001b) made within three years of the decedent’s death exceeds a specified threshold, for estates with property that has a situs in Minnesota.
• Thresholds by year (based on the decedent’s year of death):
  • 2014: $1,200,000
  • 2015: $1,400,000
  • 2016: $1,600,000
  • 2017: $2,100,000
  • 2018: $2,400,000
  • 2019: $2,700,000
  • 2020 and thereafter: $3,000,000
• The Minnesota estate tax return must include a calculation of the Minnesota estate tax due.
• The return must be signed by the personal representative.
• The form to be used is the form prescribed by the Minnesota Commissioner of Revenue.
• The filing applies to estates with a situs in Minnesota (property located in Minnesota).

Significant Changes to Existing Law

• Creates a Minnesota estate tax filing obligation tied to federal estate tax concepts, rather than a static Minnesota-specific threshold.
• Incorporates the federal gross estate and federal adjusted taxable gifts (as defined in IRC section 2001b) into the threshold determination.
• Establishes year-specific filing thresholds that increase over time, culminating in a $3,000,000 threshold for estates dying in 2020 and later.
• Requires the Minnesota estate tax return to include a computation of Minnesota tax due and to be filed on a commissioner-prescribed form, signed by the personal representative, for estates with Minnesota situs.

Compliance and Filing Details

• Filing triggers require a Minnesota estate tax return when either a federal return is required or the combined federal gross estate and federal adjusted taxable gifts exceed the applicable threshold.
• The return must compute Minnesota tax due and be signed by the personal representative.
• The form used will be prescribed by the Minnesota Commissioner of Revenue.

Relevant Terms - Minnesota estate tax - estate tax return - personal representative - situs in Minnesota - federal gross estate - federal adjusted taxable gifts - Internal Revenue Code section 2001b - form prescribed by the commissioner - Minnesota Statutes 2024 section 289A.10 subdivision 1 - thresholds by year: 1,200,000; 1,400,000; 1,600,000; 2,100,000; 2,400,000; 2,700,000; 3,000,000