M1MB: Business Income Additions and Subtractions (2025)
Minnesota · Minnesota DOR · Used for tax years 2025
Minnesota Schedule M1MB reports business income additions and subtractions for your 2025 Form M1. It covers adjustments such as federal bonus depreciation, state income taxes passed through to you, and net operating loss carryovers.
Who files this form
Use 2025 Schedule M1MB to report the business income additions and subtractions listed on the schedule. These adjustments may apply to you as an individual, a partner in a partnership, an S corporation shareholder, or a beneficiary of a trust or estate.
Amounts passed through to you by an entity are reported on the Schedule KPI, KS, or KF you received. The schedule also covers adjustments such as bonus depreciation, certain net operating losses, qualifying farm property gains, and certain business expenses. Follow the instructions for each adjustment that applies to you.
What you'll need
Depending on the adjustments you report, have these forms and information available:
- Schedules KPI, KS, or KF for additions or subtractions passed through to you.
- Federal Form 4562 and the Worksheet for Line 1 for the bonus depreciation addition.
- Prior-year Minnesota schedules and federal Form 1045, Schedule A, as listed in the Worksheet for Line 10, for the bonus depreciation subtraction.
- Federal Form 1040 or 1040-SR and your Minnesota net operating loss carryforward amount for the Worksheet for Line 19.
- Farm sale information for the Worksheet for Line 12, including debts, excluded debt forgiveness, asset fair market value immediately before the sale, and the gain included in federal income.
- Prior-year Schedule M1AR if you are reporting income from a previously reported partnership or S corporation sale on line 15.
- Your 2023 return or the specified 2019 through 2022 Schedule M1NC amounts, and any applicable 2025 Schedule KF amount, for the delayed business interest subtraction.
Common mistakes
- Counting a loss twice: The Worksheet for Line 19 says not to include Minnesota net operating losses already subtracted in a prior year.
- Missing required amended returns: If you amend your federal return to recapture previously claimed bonus depreciation, you must amend the Minnesota returns affected by the earlier bonus depreciation addition and subsequent subtractions.
- Combining suspended-loss calculations too soon: Complete a separate Worksheet for Line 4 for each entity with a suspended loss, then combine the step 6 results.
- Forgetting a later bonus depreciation addition: If you reduce the current bonus depreciation calculation because a loss cannot be deducted in 2025, you must include the bonus depreciation as an addition in a future year when that suspended loss is allowed.
Questions people ask
Where do my Schedule M1MB totals go?
Add lines 1 through 8 and enter the result on line 9. Include that amount on line 2 of Form M1. Add lines 10 through 21 and enter the result on line 22. Include that amount on line 7 of Form M1.
How do I calculate the bonus depreciation addition?
If you chose the special depreciation allowance for qualified property on federal Form 1040, complete the Worksheet for Line 1. Enter its result on Schedule M1MB, line 1.
Can I subtract a gain from selling farm property?
For a 2025 sale, you must have owned and operated the farm, and your debts must have exceeded the fair market value of your assets immediately before the sale. You must also have included the gain in federal adjusted gross income on Form 1040, line 11, and used the proceeds to pay off the property's mortgage, contract for deed, or lien. Complete the Worksheet for Line 12.
What goes on the Employee Retention Credit subtraction line?
On line 21, enter wages that were not deducted from income in the current taxable year and were used to calculate the federal Employee Retention Credit under the provisions listed in the instructions.