Minnesota Estate Taxes

Minnesota is a state that still imposes an estate tax.  The Minnesota Department of Revenue oversees the state laws governing estate for Minnesota.  The current laws governing the size of an estate that is responsible for estate tax in Minnesota went into effect January 1, 2009.

Following is an overview of the current estate tax laws in effect for Minnesota.  For more information about federal income taxes, please visit our web site’s “Tax Relief” page.

What are estate taxes?

An estate refers to the possessions a person leaves behind when they die.  When a person dies, that person may have a will.  A will defines who the person’s remaining assets pass to, whether family members, friends, or other individuals or organizations as defined in the will.  When a person dies but does not have a will, the person’s assets pass to others based on state and federal probate laws.

For the transfer of property through an estate, laws at both the state and federal level place a tax on that transfer of property.  As the property is being transferred to a person or persons who did not pay for the property or an interest in the property, the transfer is treated as income when it exceeds a certain value or amount.  Therefore, a tax is imposed on that value, which is known as the estate tax.

Who is required to file estate tax for Minnesota?

The executor of an estate is required to file an estate tax return if the person lived in Minnesota or the estate includes real or tangible personal property located in the state of Minnesota.

What is the value threshold when estate taxes apply in Minnesota?

If the person died on or after January 1, 2009, the estate of a person must pay Minnesota estate tax if the gross value of the estate exceeds at least $1,000,000.

The estate tax threshold in Minnesota does not tie directly with the exclusion amount defined for federal estate tax purposes.  From a federal standpoint, those dying on or after January 1, 2012, must have an estate valued at $5,000,000 or more before estate tax applies.

What forms does Minnesota require the executor to file related to Minnesota estate taxes?  Where must those forms be filed?

If the Minnesota estate tax laws apply to a person’s estate, whether that person was a resident or non-resident of Minnesota at the time of his or her death, the person’s estate must file Minnesota Estate Tax Form M706.

Estate tax forms and payments should be mailed to:

Minnesota Revenue

Mail Station 1315

St. Paul, MN 55146-1315

When are Minnesota estate taxes due?

The executor must file and pay Minnesota estate taxes within nine months of a person’s death.  The executor can obtain an automatic extension of up to six months beyond the initial nine month period.

However, the executor must still pay an estimate of the estate tax due by the original nine-month due date.  Any unpaid estate tax amount is subject to penalties and interest if the estate tax paid is not at least 90 percent of the final estate tax amount due.

The interest rate for 2013 is 3 percent.

How can I get help with my Minnesota estate taxes?

If you have questions about estate taxes, income taxes, or any other tax issues, you can get by calling the telephone number located at the top of this web site or completing the form below.  A tax attorney will call you to have an initial conversation about your tax questions whatever those questions may be.  This conversation is completely confidential and does not obligate you to anything further.  And the initial conversation is free of charge.

Therefore, if you have tax questions, please take the steps to get answers today.

by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.