HF31 Summary

• Updates Minnesota tax code conformity to federal Internal Revenue Code as amended through December 15, 2022, replacing the prior conformity date of December 31, 2018.

• Creates pass-through entity tax allowing partnerships, S corporations, and LLCs to elect and pay tax on behalf of owners subject to federal limitation on deductions under IRC section 164(b)(6)(B).

• Adds new provisions for disallowed business interest and net operating loss deductions with delayed carryforward mechanisms allowing five-year amortization of excess amounts beginning after December 31, 2022.

• Provides temporary additions and subtractions related to COVID-19 pandemic relief measures including employee retention credits, paid leave credits, and charitable contribution deductions for 2020-2021.

• Extends statute of limitations allowing amended returns through December 31, 2023, for taxpayers affected by changes in the bill, with interest accruing beginning January 1, 2024.