MN property tax information
There is a Senior Citizen Property Tax Deferral Program that allows people 65 years of age or older, whose household incomes are $60,000 or less, to defer a portion of their property tax on their home. This deferral program has two primary advantages for senior citizens. It limits the maximum amount of property tax you pay to three percent of your total household income, and it provides predictability. The amount of tax you pay will not change for as long as you participate in this program. It is not a tax forgiveness program. It is a low interest loan from the state. The deferred tax is paid by the state to your county. Interest will be charged on this loan. The interest rate will be adjusted annually, but will never exceed five percent. A lien will attach to your property.
Minnesota has two property tax refund programs for homeowners: the regular property tax refund, and the special property tax refund. You may be eligible for one or both, depending on your income and the size of your property tax bill. Click for details.
Inheritance and Estate Taxes
Minnesota has an estate tax. The estate tax is a tax on all of the assets of a decedent before they are distributed to beneficiaries. If the estate meets the filing requirements, the estate pays this tax to the IRS and/or the state in which the decedent lived (prorated to any other states where the decedent had property). Many states have a threshold different from the federal level.
Minnesota does not have an inheritance tax. An inheritance tax is a tax on the beneficiaries of an estate (a tax on what you inherit). If you are a beneficiary, you generally do not have to include inheritance on your income tax return. However, you may have to pay income tax if you inherit an IRA/annuity, etc., which includes the decedent’s pre-tax dollars. You should be notified by the estate if this is the case. The income tax is owed to the state in which the beneficiary lives (not the state where the decedent lived.).
For further information, visit the Minnesota Department of Revenue site.
* The tax brackets reported are for single taxpayers. For married taxpayers filing jointly, the same rates apply to income brackets ranging from $33,770 to $131,171 (2011). A 6.4% AMT rate is also applicable.
** Minnesota allows personal exemption or standard deductions as provided in the Internal Revenue Code.
Source: www.retirementliving.com
