State tax filing
My understanding from what you say is:
- You are a resident of SD, so no state tax return here.
- You have a MN rental property and have never filed a MN Tax Return.
- My concern here is MN requires nonresidents to file a tax return if your Minnesota gross income meets or exceeds the minimum filing requirement ($13,825 for 2023).
- I know you said you never had a profit, but the requirements in MN is for gross income. This would be your total rents received, before any deductions. Did you have total rents received that exceeded the amount from the table below? You may have had a filing requirement for some years in MN. This is separate from your initial question, so let me continue.
- Wife is a NE resident and receives the Homestead Exemption for her RE Taxes.
- She does not qualify for the Homestead Exemption if she is using her home as a short term rental.
- To qualify for the Homestead Exemption, it must be owner occupied.
- If married, regardless of filing status and spouse residency or ownership, income from both spouses will be considered.
Because you want to file your taxes, both federal and state, to minimize your taxes would be to file Married Filing Jointly. It is almost always better to file jointly. This will save on preparation costs as well since you are filing one return together instead of separate returns.
- You will file a Resident Nebraska return.
- You will file a Nonresident Minnesota return.
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