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Level 1
posted Apr 5, 2024 12:52:16 PM

MN Property Tax filing and additional non-taxable income

I have completed my federal and state filing with TurboTax Deluxe desktop.  Now working on my Minnesota property taxes.  Using example numbers, I have $2000 in 401k contributions for 2023 (box 12 D on W2) and $8000 in ROTH contributions (part on my W2 and part outside of 401k).  TurboTax enters the $2000 for line 5 of M1PR "additional nontaxable income" which makes sense to me since the ROTH is all post-tax.

 

On the MN tax website, filling out the online form, there is a space for "Deductions taken on federal return - IRA" which I assume is for traditional IRAs.  Then it asks if we made contributions for a qualified retirement plan and lists (Qualified retirement plans include: 401K, 403B, IRA, Roth IRA, and 457).  The amount I enter here reduces the total household income.  If I put the full $10,000 in I get a $650 refund.  If I just put in the $2000, I get zero.

 

To make it more confusing, I received a letter saying I forgot the "deferred compensation" on my 2020 property tax refund and they say it should be additional income and I need to pay back what I was refunded.  The amount listed is my 401k (not ROTH) contribution.

 

How can it increase my income in 2020 and decrease it in 2023?

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