April 18, 2024 Minnesota enacts retroactive change to corporate net operating loss deduction - amended returns may be required On April 8, 2024, Governor Tim Walz signed House File 3769 (HF 3769), which retroactively extends by one year the effective date of Minnesota's decoupling from the federal 80% limitation on corporate net operating losses (NOLs) to tax years beginning after December 31, 2023. Retroactive change of NOL limit With the enactment of HF 3769, the limit on Minnesota's NOL deduction retroactively returns to 80% (rather than 70%) of taxable net income for tax years beginning after December 31, 2017, and before January 1, 2024. For tax years beginning after December 31, 2023, the limit on the NOL deduction decreases to 70% of taxable net income. The Minnesota Department of Revenue has updated its 2023 NOL schedule to account for this change. Implications Taxpayers that have filed their 2023 Minnesota income tax return should consider filing an amended return to claim the additional NOL deduction. The Minnesota Legislature is also considering other tax provisions this legislative session including the following:
Taxpayers should monitor the progress of this pending legislation.
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