Minnesota Tax Form M1WFC - Minnesota Working Family Credit Instructions

Schedule M1WFC instructions

Who is eligible?

If you are a Minnesota resident and are eligible for the federal earned income credit (EIC), you are also eligible for the Minnesota working family credit.

Part-year residents and nonresidents may also be eligible for the credit, which is apportioned by the percentage of income taxable to Minnesota.

Before you can complete Schedule M1WFC, you must:

  1. follow the steps in the instructions for your federal return to determine if you qualify for the federal EIC, and
  2. complete the appropriate federal EIC Worksheet.

Penalty for fraudulently claiming a refundable credit

If you file a return that fraudulently claims a refundable credit, including the Minnesota working family credit, you will be assessed a penalty. The penalty is 50 percent of the fraudulently claimed refund and is in addition to the 50 percent penalty on the understated tax.

Information on qualifying children

Near the top of Schedule M1WFC, check a box to indicate the total number of qualifying children. Enter the requested information for each qualifying child. If you have more than two qualifying children, you have to list only two.

Enter the number of months the child lived with you during the year. If the child lived with you in the United States for more than half of the year but less than seven months, enter “7” in the space provided. If the child was born or died in 2008 and your home was the child’s home for the entire time he or she was alive during the year, enter “12.”

Indicate the number of your qualifying children in the boxes to the left of line 29 of Form M1.

Line instructions

Round amounts to the nearest whole dollar.

Line 6

If your Minnesota gross income is below the filing requirement and you are filing Form M1 to claim this credit, you should have entered zero on line 23 of Schedule M1NR. However, to correctly determine this credit, you must first fully complete Schedule M1NR to determine what the amounts would have been, and then follow the steps below:

1. Line 11, column B, of Schedule M1NR . . . ________
2. Line 22, column B, of Schedule M1NR . . . ________
3. Subtract step 2 from step 1. (If result is zero or less, stop here. You do not qualify for the credit) . . . ________
4. Line 24 of Schedule M1NR . . ________
5. Divide step 3 by step 4 and enter the result as a decimal (carry to five decimal places). If step 3 is more than step 4, enter 1.0. Enter result here and on the space provided on line 6 of Schedule M1WFC . . ________
6. Multiply step 5 by line 5 of Schedule M1WFC . . . ________

Enter the result from step 6 on line 6 of Schedule M1WFC and on line 29 of Form M1. Include a copy of this schedule when you file your return.

Line 7

American Indians working and living on an Indian reservation and taxpayers with JOBZ business income

The working family credit is based only on earned income taxable to Minnesota. Therefore, you must apportion your credit if you:

  • were an American Indian working and living on a reservation and had earned income not subject to Minnesota tax, or
  • claimed a subtraction for income from operating a qualified business in a Job Opportunity Building Zone.

To apportion your working family credit, follow the steps below:

1. Federal adjusted gross income (from line 37 of Form 1040, line 21 of Form 1040A, or line 4 of Form 1040EZ) . . . ________
2. Earned income that is not taxable to Minnesota . . . ________
3. Subtract step 2 from step 1 . . ________
4. Divide step 3 by step 1 and enter the result as a decimal (carry to five decimal places) . . ________
5. Amount from line 5 on the front of this schedule . . . ________
6. Multiply step 5 by step 4 . . . ________

Enter the result from step 6 on line 7 of Schedule M1WFC and also on line 29 of Form M1. Include a copy of this schedule when you file your return.

 

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