ETP: Employer Transit Pass Credit (2025)
Minnesota · Minnesota DOR · Used for tax years 2025
Minnesota Form ETP calculates the Employer Transit Pass Credit for 2025. It reports the employer’s cost of transit passes and amounts charged to employees, then calculates a credit equal to 30% of the difference. The credit is not refundable and can only be applied to current tax
Who files this form
Use the 2025 Schedule ETP to claim the Employer Transit Pass Credit if you purchase qualifying transit passes to resell or give to employees. The schedule is for C corporations, S corporations, partnerships, sole proprietors, fiduciaries, and tax-exempt nonprofit organizations.
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 publicly or privately owned mass transit facility, or by a person 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 this information ready to complete Schedule ETP:
- Employer name, FEIN, and Minnesota Tax ID.
- Original cost to the employer of passes sold or given to employees.
- Total amount charged to employees for those passes.
Enclose the completed schedule when you file your Minnesota return.
How to file
Complete the 2025 Schedule ETP, rounding amounts to the nearest whole dollar:
- Enter the original cost of passes sold or given to employees on line 1.
- Enter the total charged to employees on line 2.
- Subtract line 2 from line 1 and enter the difference on line 3.
- Multiply line 3 by 30% (0.30) and enter the credit on line 4.
Report the credit on the return or schedule for your organization type:
- 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 you file your Minnesota return. The supplied text does not give a mailing address or e-file instructions.
Common mistakes
- Not rounding amounts: You must round to the nearest whole dollar.
- Leaving out Schedule ETP: Enclose it when filing your Minnesota return.
- Treating the credit as refundable or available for another year: It is not refundable and can only be applied to your current tax liability.
- Exceeding the fiduciary limit: A fiduciary's credit cannot exceed Form M2, line 15.
Questions people ask
How much is the credit?
The credit is 30% of the difference between what you pay for the passes and what you charge employees.
Can passes given free to employees qualify?
Yes. The instructions cover passes purchased to resell or give to employees, provided the qualifying conditions are met.
Is the credit refundable?
No. It can only be applied to your current tax liability.
Can S corporations and partnerships pass through the credit?
Yes. Remaining credit may be passed through to partners and shareholders.
Do the passes have to be used in Minnesota?
Yes. The instructions require the passes to be used in Minnesota.