M2NC: Federal Adjustments (2024)
Minnesota · Minnesota DOR · Used for tax years 2024
Minnesota Schedule M2NC reports adjustments to federal taxable income for federal law changes Minnesota has not adopted for tax year 2024. The total adjustment carries to Form M2, and the schedule must be included when filing that return.
Who files this form
Use Schedule M2NC if any federal provisions in H.R. 1 affect the taxable income reported on your 2024 federal Form 1041. You must make an income adjustment on your 2024 Minnesota return.
Calculate the adjustment by comparing your federal taxable income under current federal law with the amount calculated using the Internal Revenue Code as amended through May 1, 2023.
What you'll need
- Your 2024 federal Form 1041 and Minnesota Form M2.
- Any Schedules KFNC, KPINC, or KSNC received for your share in another business, estate, or trust. Include their net adjustments on the applicable lines.
- Statements showing depreciation calculations, if you report amounts on lines 1b, 2b, 2c, 3b, 8b, or 10a.
- A statement showing the calculation of any amount entered on line 16, Other Adjustments to Federal Taxable Income.
The schedule also asks for the name of the estate or fiduciary, federal ID number, and Minnesota ID number.
How to file
Include Schedule M2NC when you file Form M2. Attach any calculation statements required for the adjustments you report.
The supplied text does not provide a mailing address or instructions for filing electronically.
Common mistakes
- Skipping the instructions: The form says to read the separate instructions before completing the schedule.
- Using the wrong sign: Enter an adjustment as negative if it reduces federal taxable income, or positive if it increases federal taxable income.
- Not rounding: Round amounts to the nearest whole dollar.
- Leaving out the schedule: You must include Schedule M2NC with Form M2.
- Not keeping your records: Save your entire 2024 Minnesota Form M2, Schedule M2NC, and all worksheets used to determine the adjustments.
Questions people ask
Why is a federal adjustment needed?
Minnesota has not adopted federal law changes enacted after May 1, 2023, that affect federal taxable income for tax year 2024. Schedule M2NC calculates adjustments needed to determine Minnesota taxable income.
Do I include adjustments received from another business, estate, or trust?
Yes. Each applicable line includes the net adjustments received on Schedules KFNC, KPINC, and KSNC for your proportional share in another business, estate, or trust.
Where does the total on the 2024 schedule go?
Line 17 of the 2024 Schedule M2NC totals lines 1 through 16. If the total is positive, enter it on Form M2, line 49. If it is negative, enter it as a positive number on Form M2, line 61.
Do I need to attach depreciation calculations?
Yes, if you report amounts on lines 1b, 2b, 2c, 3b, 8b, or 10a. The instructions require a statement showing the calculation of the depreciation amount for those lines.