M1MB: Business Income Additions and Subtractions (2024)
Minnesota · Minnesota DOR · Used for tax years 2024
Minnesota’s 2024 Schedule M1MB reports business income additions and subtractions, including adjustments for bonus depreciation, certain business deductions, and amounts passed through from an entity. The totals carry to Form M1.
Who files this form
Use 2024 Schedule M1MB to report the business income additions and subtractions that apply to you. These amounts may arise from your own activities or be passed through to you as a partner, S corporation shareholder, or beneficiary of a trust or estate.
Passed-through amounts are reported on Schedule KPI, KS, or KF received from the entity. Schedule M1MB covers items such as bonus depreciation, state income taxes passed through to you, certain net operating loss adjustments, and qualifying business expense subtractions.
What you'll need
Depending on the additions or subtractions you report, have these forms and information available:
- Federal return and depreciation forms: Form 1040 or 1040-SR and federal Form 4562, as needed for the worksheets.
- Pass-through schedules: Schedules KPI, KS, or KF, plus any applicable KPINC, KSNC, or KFNC schedules you received.
- Minnesota adjustment schedules: Schedule M1NC for the adjustments used in the worksheets.
- Prior-year returns and schedules: For the bonus depreciation subtraction, the worksheet uses 2019 through 2023 Minnesota schedules and federal Form 1045 information. Other subtractions may also require prior-year addition or carryforward amounts.
- Farm sale information: If claiming the farm property subtraction, gather the amounts of debts, excluded debt forgiveness, asset fair market value immediately before the sale, and gain included in federal income.
- Schedule M1AR: The form directs you to enclose this schedule for the accelerated recognition of nonresident installment sales on line 6.
How to file
- Enter your name and Social Security number on Schedule M1MB.
- Complete the applicable addition and subtraction lines, using the worksheets where directed.
- Add lines 1 through 8. Enter the total on line 9 and include it on Form M1, line 2.
- Add lines 10 through 20. Enter the total on line 21 and include it on Form M1, line 7.
- Enclose Schedule M1AR for the accelerated recognition of nonresident installment sales reported on line 6.
The supplied text does not give a mailing address or e-filing directions.
Common mistakes
- Counting an NOL subtraction twice: The line 19 worksheet says not to include amounts already subtracted in a prior year.
- Including an ineligible Section 179 amount: Line 11 says not to include an amount attributable to a Section 179 addition for property placed in service in a tax year beginning after December 31, 2019.
- Combining suspended-loss entities too early: For line 4, complete a separate worksheet for each entity with a suspended loss, then combine the step 6 results.
- Forgetting a later bonus depreciation addition: If you reduce the line 1 worksheet amount because a loss cannot be deducted in 2024, the instructions require a bonus depreciation addition in a future year when that suspended loss is allowed.
Questions people ask
Where do I find amounts passed through from a business, trust, or estate?
Amounts received as a partner, shareholder, or beneficiary are reported on Schedule KPI, KS, or KF received from the entity.
Can I claim a bonus depreciation subtraction in 2024?
You may qualify if you reported 80 percent of federal bonus depreciation as an addition on your 2019 through 2023 Form M1, or received a federal bonus depreciation subtraction from an estate or trust in 2024. Use the Worksheet for Line 10 to determine the amount.
When does a farm property sale qualify for a subtraction?
For a gain received in 2024, you must have owned and operated the farm, had debts greater than the fair market value of your assets immediately before the sale, included the gain in federal adjusted gross income on Form 1040, line 11, and used the proceeds to pay the mortgage, contract for deed, or lien on the property. Complete the Worksheet for Line 12.
What Employee Retention Credit amount goes on line 17?
Include wages not deducted from income in the current taxable year that were used to calculate the federal Employee Retention Credit under the provisions listed in the line 17 instructions.