Charitable Donations NOT a Factor in Residency for Income Tax Purposes

By Myron Frans, Minnesota Revenue Commissioner, written for the Minnesota Council of Nonprofits’ 2014 Spring Edition of Nonprofit News.

Minnesota is fortunate to have such a robust and reliable source of charitable donations that support many Minnesota nonprofits. One way the state encourages charitable giving is by allowing donors to deduct contributions from taxable income on their state tax return.
 
Of course, not everyone who makes charitable contributions to our state’s nonprofits files a Minnesota tax return. Minnesota residents who are required to file a federal return must also file a state return. Nonresidents are required to file in Minnesota if they earn a certain amount of income here ($10,000 or more for 2013).
 
For most taxpayers, their legal residence (or “domicile”) is in the state where they live, work, and send their kids to school. But it can be more complicated – for both taxpayers and the Department of Revenue – when people spend a lot of time outside Minnesota, or move to/from another state during the year.
 
When a person’s domicile is unclear, the department can weigh up to 26 factors to determine their residency for income tax purposes – but we do not include charitable donations. In fact, state law prohibits the department from considering charitable donations to determine residency.

 

So what factors does the department consider? While each taxpayer’s situation is unique, some of the most common factors include:
 
• How much time do you spend in Minnesota during the year?
• Where do your spouse and children live?
• Do you own a home in Minnesota and receive “homestead” for property tax purposes?
• Do you have a Minnesota driver’s license? Are your vehicles registered or kept here?
• Are you registered to vote in Minnesota?
• Where are your cars or belongings insured?
 
For more information, visit www.revenue.state.mn.us and type residency in the Search box. If you have questions about charitable donations and residency, contact the Minnesota Department of Revenue by email at individual.incometax@state.mn.us, or by phone at 651-296-3781 or 1-800-652-9094.

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