Minnesota’s 92nd legislative session ended their 2021 regular session on May 17th without a budget. The Governor and Legislative leaders instead released a budget framework with a target of $52 billion for the next biennium. Lawmakers worked for four weeks on final details largely outside of the public eye until they convened a special session on June 14th. All spending bills were passed and signed into law by June 31st.
The need for a special session was largely due to a late infusion of funding from the American Rescue Plan Act (ARPA) that was signed into law by President Biden on March 11, 2021. Roughly $8.5 billion was allocated in the bill to the State of Minnesota for various programs.
Budget
A final budget of $52 billion was signed into law on June 31, 2021. This biennial budget is an increase of approximately $1.3 billion over the previous budget – much of that one-time funding from ARPA. Included in the bill are direct tax cuts of $644 million to people who lost jobs and employers who kept people working during the pandemic.
Paycheck Protection Program
The final tax bill included full conformity to federal tax law with regards to the Paycheck Protection Program at a cost of roughly $375 million in fiscal year 2022. Businesses and organizations that received PPP loans will not be subject to either federal or state income tax on the amount of the loan received.
With the new year, the Internal Revenue Service (IRS) has rolled out a new W-4 form, the document employers use to determine how much to withhold from an employees paycheck for taxes. This is the first big update to the form in three decades.
This year the Minnesota Legislature passed and Governor Walz signed into law a significant rewrite of Minnesota’s tax code to bring the state into conformity with the federal Tax Cuts and Jobs Act of 2017. This new law will have significant impacts on both individuals and businesses going forward for the 2019 tax filing season, as well as retroactively as the law may require amendments to 2018 tax returns. To ensure that our members have all the information they need on what this new law will mean for them, Greater Mankato Growth is partnering with Abdo, Eick & Meyers; CliftonLarsonAllen; and Eide Bailly to host a free forum on Minnesota Tax Reform on December 10. Our panel of tax experts will review the federal and new state tax laws and how it will impact businesses as well as discuss what you need to know about retroactive tax filings for 2018. You can register and get more information here: 
Following Governor Mark Dayton’s veto of legislation that would have conformed Minnesota’s tax system to the new Federal tax law, there is uncertainty as to what this means for businesses and individuals. The following guest blog courtesy of 
Greater Mankato Growth invites you to join a delegation of Greater Mankato Business Leaders on April 18 as we travel to St. Paul to participate in the Minnesota Chamber Business Day at the Capitol. This event brings business leaders from across the state together to collectively advocate for key business issues. With the Legislature considering a major tax reform bill this year, it’s critical that our legislators hear from business leaders.
Greater Mankato Growth Blog 