ETP: Employer Transit Pass Credit (2024)
Minnesota · Minnesota DOR · Used for tax years 2024
The 2024 Minnesota Form ETP calculates the Employer Transit Pass Credit for transit passes sold or given to employees. It reports the employer’s cost and amounts charged to employees, then calculates a credit equal to 30% of the difference. The credit is not refundable and can on
Who files this form
Use the 2024 Schedule ETP to claim the Employer Transit Pass Credit if you qualify. The form is for C corporations, S corporations, partnerships, sole proprietors, fiduciaries, and tax-exempt nonprofit organizations that buy transit passes to resell or give to employees.
To qualify:
- The pass must be a pass, token, farecard, voucher, or similar item that provides transportation at regular or reduced prices.
- Transportation must be provided by a public or privately owned mass transit facility, or by someone in the business of transporting people for compensation or hire. For the latter, the vehicle must seat at least six adults, not including the driver.
- The passes must be used in Minnesota.
What you'll need
Have the following information ready to complete Schedule ETP:
- Employer name, FEIN, and Minnesota Tax ID.
- The original cost to you of passes sold or given to employees.
- The total amount you charged employees for those passes.
Enclose the completed schedule with your Minnesota return.
How to file
- Enter your employer name, FEIN, and Minnesota Tax ID.
- Enter the original cost of the passes on line 1 and the amount charged to employees on line 2.
- Subtract line 2 from line 1 and enter the result on line 3.
- Multiply line 3 by 30% (0.30) to calculate the credit on line 4. Round amounts to the nearest whole dollar.
Report the credit on the applicable 2024 return or schedule:
- C corporation: Form M4T, line 20.
- S corporation: Form M8, line 7.
- Partnership: Form M3, line 6.
- Sole proprietor: Schedule M1C, line 5.
- Fiduciary: Form M2, line 23. The credit cannot exceed Form M2, line 15.
- Tax-exempt organization: Form M4NPI, line 4a.
Enclose Schedule ETP when filing your Minnesota return. The text does not provide a mailing address or e-filing instructions.
Common mistakes
- Not rounding amounts: You must round to the nearest whole dollar.
- Leaving out the schedule: Enclose Schedule ETP with your Minnesota return.
- Treating the credit as refundable: It is not refundable and can only be applied to your current tax liability.
- Exceeding the fiduciary limit: A credit reported on Form M2, line 23, cannot exceed Form M2, line 15.
Questions people ask
How much is the credit?
The credit is 30% of the difference between what you paid for the passes and what you charged employees.
Can I claim the credit for passes I give employees for free?
You may qualify for passes you buy and give to employees, as well as passes you resell to them. The passes must meet the form's transportation requirements and be used in Minnesota.
Is the credit refundable?
No. It can only be applied to your current tax liability.
Can an S corporation or partnership pass through remaining credit?
Yes. The form states that remaining credit may be passed through to partners and shareholders.