Agency error means richest Minnesotans owe more in taxes

ST. PAUL, Minn. (AP) — About 45,000 of the richest residents in Minnesota owe the state about $38 million because of a mistake by the state Department of Revenue.

Authorities said the Legislature changed the standard income tax deduction during the 2019 session but it wasn’t reflected correctly in the worksheet used by tax preparers in 2019 and 2020.

The mistake affected taxpayers in the state’s highest income tax bracket, with federal adjusted gross incomes above about $280,000 for single tax filers and about $360,000 for married couples filing jointly, the Star Tribune reported.

House tax committee chair Rep. Paul Marquart, a Democrat from Dilworth, estimated that someone earning $500,000 a year would likely owe an additional $400.

The Revenue Department notified tax preparers last fall and began sending letters to taxpayers in mid-April, according to agency spokesman Ryan Brown. The affected taxpayers have 60 days to come up with the money, which will be deposited in the state’s general fund.

“We apologize for the error and if the taxpayer is unable to make the payment, they should contact us to discuss their payment options,” Brown said in an email.