Recently, the State of Minnesota updated its individual income tax rules which now allows eligible Band members who live and work on the reservation to take an additional refundable working family tax credit starting in 2017. Under prior law, those members whose wages were exempt from state tax were not eligible for the Minnesota Working Family Credit.
The Minnesota Working Family Credit is a refundable credit for working individuals whose income is below a certain level. It is similar to the federal Earned Income Tax Credit (EITC). Both credits are refundable, which means you can receive a refund even if you don’t owe tax.
Under the new rules, Band members are eligible even though their wages are exempt from state taxation. In order to claim the credit, Band members must qualify for the federal income tax credit. You must file a Minnesota income tax return in order to claim this credit. This change is effective for tax year 2017. The tax returns are due on April 17, 2018.
Band members are highly encouraged to talk to their tax preparer or advisors before ling their returns to ensure they are getting the full bene t of this recent change.