I got a rebate check from the Minnesota EV Rebate program and entered it as other income in the federal section. The rebate is not subject to MN tax. How do I remove it

Forum|Forum|1 year ago
January 19, 2025
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I got a rebate check from the Minnesota EV Rebate program and entered it as other income in the Federal Tax section. The rebate is not subject to state tax. How do I remove it from my income in the Minnesota Tax section?

Best answer by desflurane

The Minnesota Department of Revenue neglected to allow for the subtraction of the $2,500 EV rebate from Minnesota Taxable Income.

AmyC

Employee

The rebate check is typically no longer considered income for your tax return. Instead, it reduces your basis in the asset. The IRS has changed several laws around energy efficiency. If you received a 1099-MISC for the rebate, then it would be taxable income.

MN is still updating, see Form availability. If you have taxable income, you should be able to remove it once the program is complete.

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hoffadgAuthor

I clicked on the link and it looks like the MN forms are ready but I still can't find where I can subtract the amount I entered in the Federal section for the EV rebate. I'm using the online version.

Thanks,

Dan

DaveF1006

It depends. According to this Turbo Tax link, most, if not all these forms, are not ready until Jan 30. Please, check back after that time for an update.

@hoffadg

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desfluraneAnswer

The Minnesota Department of Revenue neglected to allow for the subtraction of the $2,500 EV rebate from Minnesota Taxable Income.

hoffadgAuthor

This is also the best answer I came up with after asking the MN individual income tax help line. They more or less said if there isn't a subtraction for it on the M1M, it will flow through from your federal return as adjusted gross income and will be reported on line one of the 2024 Form M1. When I asked if the EV rebate will eventually be added to the M1M at a later date, I just got a repeat of the message above.

DaveF1006

After further research, it seems the intent of the MN EV rebate was to be a dealer rebate. In that case, it's not taxable. If you only received the checks and no 1099-MISC form you don't have to report it.

If you received a 1099-MISC form then enter the 1099-Misc as received and then also put in a corresponding negative amount in "Less common>miscellaneous income" and describe as MN EV Rebate" Here are the steps.

Log into your account
Select Wages and income
Less Common income
Miscellaneous Income, 1099-A, 1099>start
Scroll to the bottom of the page to Other Reportable Income
Other taxable income, answer yes
Now for the description, put in "1099 MISC Received for non-taxable MN dealer rebate" then represent the amount reported on the 1099 MISC with a minus sign in front. For an example, if the income reported is $5000, record your entry -5000 without a dollar sign.

@desflurane

@hoffadg

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vern99

There is a lot of confusion and misinformation about the 2024 MN EV Rebate. The Minnesota Department of Revenue has clarified taxability regarding the 2024 rebate.

Per the MN Instructor Digest dated Feb 2, 2025 issued by MNDOR, this is the guidance.

MN issues a 1099-MISC to taxpayers who received an EV Rebate in 2024. This amount is taxable income for both Federal and MN income taxes.

Wrbcks

Thanks Vern. That settles it. I appreciate your sharing this.

vern99

You are welcome.

This is a confusing issue and it may well be that the Minnesota Department of Revenue is in error.

Their (MNDOR) position is in direct conflict with the IRS Publication 525 as page 33 discusses rebates and state the rebate IS NOT taxable. I suspect that the MNDOR may have a position change and when and if that occurs, an amended State Return (M1X) would need to be filed.