Minnesota tax payment plan with the Department of Revenue
Minnesota uses the term payment agreement for this. This program is run by the Department of Revenue. People with a bill can use the Payment Plan Agreement System to apply online. A business must ask Revenue directly.
- Online requests
- Individuals only
- Notice before it ends
- 14 days
- Late income tax
- A 4% penalty
- License holds begin at
- Starting at $500 in unpaid amounts
Who must ask directly and who can apply online
Online use of the Payment Plan Agreement System is allowed for an individual only when every condition below is met. The Minnesota payment agreements page lists them:
- You have a Social Security Number. It may be your own or the one you have in your role as an assessed officer of a business.
- You have received a bill.
- No payment agreement covers you right now.
- You are not in bankruptcy and no levy has been issued against you.
Business debts and the sales tax permit
A business requests its agreement by phone, email or letter. If the terms are broken, Revenue may revoke a sales tax permit held by the business. Your right to a hearing on that revocation is given up once you sign the agreement.
Businesses under the cannabis tax and businesses with an active liquor license cannot get an agreement at all.
How is the monthly amount set?
How much you pay is decided by Revenue based on your current finances, using the same guidelines for living costs that the IRS applies. A personal financial statement may be requested from you, listing your income, expenses and assets, with proof included A business may be asked for a business financial statement
Once you sign, the terms do not change. Your state or federal government refunds still pay the debt and may end the plan early. While a plan is in place, Revenue can keep collecting. Filing a lien (a claim against your property that is made public) can be part of that.
Interest and penalties do not stop
Under 270C.40, unpaid tax interest each year follows the bank prime rate for the six months ending September 30, rounded to a whole percent. The new rate takes effect each January 1.
The penalties are set by Section 289A.60. Individual income tax that is paid late has a 4% penalty. If more tax is ordered later and stays unpaid for 60 days, another 4% is added. Late sales and withholding tax starts at 5% and rises the longer it stays unpaid.
What can end a Minnesota payment agreement?
Reasons a plan may end include missed payments, a skipped new return, an ignored request for updated finances and income that improves. For these reasons, Revenue can deny or cancel an agreement. Your denial letter tells you that you may ask the Taxpayer Rights Advocate for a reconsideration.
You get at least 14 days of notice before a plan ends, as Section 270C.52 requires, unless collection is in jeopardy. Revenue may accept an offer in compromise under that law. It settles the debt for a smaller amount and it allows for basic living costs.
The IRS, wages and licenses
270C.72 says a licensing office of the state or locality must refuse or revoke a business or professional license if Revenue reports unpaid tax of $500 or more. Revenue can also tell an employer to hold back wages after written notice of 30 days has passed.
Your Minnesota agreement and any plan you have with the IRS stay fully separate. Each plan includes a separate payment. For your budget, both agencies rely on the same IRS living standards. Plan for the two payments at once.
Nearby states
Do you owe both Revenue and the IRS?
Do you owe money to Minnesota Revenue and to the IRS at the same time? A licensed tax pro can set up both payment agreements for you on a free call, working from one honest budget.
· numbers synced