Minnesota is one of the many states that has decoupled its estate tax laws from the federal laws. What this means for Minnesota residents and nonresidents who own real estate or tangible personal property located in Minnesota is the following:
- If the decedent was a resident of Minnesota at the time of death, then the estate is required to file a Minnesota estate tax return, Form M706, if it meets at least one of the following requirements: (1) The gross estate is at least or more than $1,000,000 on the date of death, or (2) The estate is required to file a federal estate tax return, IRS Form 706.
- If the decedent was a nonresident of Minnesota, the estate is required to file Form M706 if the total federal gross estate is $1,000,000 or more and property located in Minnesota is included in the federal gross estate.
- If IRS Form 706 isn't required to be filed, nonetheless Form 706 for the year of death must be completed to determine what lines 1 through 4 of the return would have been because these lines are needed to properly prepare Form M706.
- Form M706 must be filed within nine months of the date of death and any tax due must be paid at the same time.
- An extension of time to file Form M706 may be requested, however, even if an extension is granted it won't delay the time for payment of any tax due.
- The tax rate is a progressive rate that maxes out at 16% for the amount above $10,040,000.
This information is courtesy of the Minnesota Department of Revenue.
The bottom line - if you're a Minnesota resident and your estate is passing to someone other than your spouse and the value is $1,000,000 or more, or if you're a nonresident who owns real estate and/or tangible personal property located in Minnesota and your estate is valued at $1,000,000 or more, then your estate may owe a Minnesota estate tax. Up next, Nebraska inheritance taxes.
- Minnesota Estate Tax Calculators
- Understanding Death, Estate and Inheritance Taxes
- State Estate Tax Chart
- Understanding the State Estate Tax Exemption Trap
- When is a Federal Estate Tax Return Required to Be Filed?
- How to Calculate Your Federal Estate Tax Liability
- How to Reduce or Even Eliminate Your Estate Tax Bill