MN Residency Test

 Minnesota Estate Tax Exemption:  The Minnesota estate tax exemption amount will increase in 2017 to $1.8 million, up from $1.6 million in 2016, and $1.4 million in 2015. This state estate tax exemption will increase to $2 million in 2018. The Minnesota estate tax ranges from 10% – 16%.

To Leave or Not to Leave: Determining Minnesota Residency for Tax Purposes

Minnesota, The new tax law significantly affects taxpayers and their estates by enacting The Minnesota Legislature passed this Omnibus Tax Bill on May 20, 2013 and Governor Dayton signed it into law on May 23, 2013.

Minnesota Rule 8001.0300 sets out 26 factors that can be used to determine whether an individual is a resident of Minnesota for income tax purposes (NOTE: while nothing in Minnesota Rule 8001.0300 limits its application to the determination of residency for income tax purposes, no Minnesota court decision has addressed whether the factors apply in the context of Minnesota estate tax liability). The following items listed will be considered in determining whether or not a person is domiciled in this state:

  1. location of domicile for prior years;
  2. where the person votes or is registered to vote, but casting an illegal vote does not establish domicile for income tax purposes;
  3. status as a student;
  4. classification of employment as temporary or permanent;
  5. location of employment;
  6. location of newly acquired living quarters whether owned or rented;
  7. present status of the former living quarters, i.e., whether it was sold, offered for sale, rented or available for rent to another;
  8. whether homestead status has been requested and/or obtained for property tax purposes on newly purchased living quarters and whether the homestead status of the former living quarters has not been renewed;
  9. ownership of other real property;
  10. jurisdiction in which a valid driver’s license was issued;
  11. jurisdiction from which any professional licenses were issued;
  12. location of the person’s union membership;
  13. jurisdiction from which any motor vehicle license was issued and the actual physical location of the vehicles;
  14. whether resident or nonresident fishing or hunting licenses were purchased;
  15. whether an income tax return has been filed as a resident or nonresident;
  16. whether the person has fulfilled the tax obligations required of a resident;
  17. location of any bank accounts, especially the location of the most active checking account;
  18. location of other transactions with financial institutions;
  19. location of the place of worship at which the person is a member;
  20. location of business relationships and the place where business is transacted;
  21. location of social, fraternal or athletic organizations or clubs, including in a lodge or country club, in which the person is a member;
  22. address where mail is received;
  23. percentage of time (not counting hours of employment) that the person is physically present in Minnesota and the percentage of time (not counting hours of employment) that the person is physically present in each jurisdiction other than Minnesota;
  24. location of jurisdiction from which unemployment compensation benefits are received;
  25. location of schools at which the person or the person’s spouse or children attend, and whether resident or nonresident tuition was charged; and
  26. statements made to an insurance company concerning the person’s residence and on which the insurance is based. Any one of the items listed above will not, by itself, determine domicile.