M2SB: Income Tax Computation for S Portion of ESBT (2025)
Minnesota · Minnesota DOR · Used for tax years 2025
Minnesota Schedule M2SB computes the 2025 income tax for the S portion of an ESBT. It reports federal taxable income, Minnesota additions and subtractions, Minnesota taxable net income, and the total tax to include on Form M2.
Who files this form
A trust filing as an Electing Small Business Trust (ESBT) must file Schedule M2SB to report all items relating to its S portion. Report all income from the S portion on this schedule and include a copy of Schedule KS.
What you'll need
Have these forms and supporting details ready:
- Form M2, with Schedule M2SB and a copy of the federal computations for the S portion of the ESBT.
- Schedule KS, which must be included. Use the Minnesota apportionment factor on line 50.
- An attachment showing the apportionment calculation for income, deductions, and modifications.
- Schedule M2NM to determine the amounts on lines 2 and 6. The form directs you to enclose it.
- A separate Schedule M2MT for the S portion, completed and enclosed for line 10.
- Identifying information: the trust's name, federal ID number, and Minnesota ID number, plus the name and federal tax ID of each S corporation. Attach a statement if you need space for more than two corporations.
The form also references Schedule M2SBNC for federal-change adjustments on lines 18 and 31, and the Form M2 instructions for the tax table and instructions for lines 12 through 44.
How to file
File Schedule M2SB with Form M2. Include the federal computations for the S portion, a copy of Schedule KS, and the required supporting attachments.
To complete the computation:
- Round amounts to the nearest whole dollar.
- Apportion income, deductions, and modifications using the S corporation's Minnesota apportionment factor on Schedule KS, line 50. Attach the calculation.
- Complete the income, addition, and subtraction lines to determine Minnesota taxable net income on line 8.
- Use the tax table in the Form M2 instructions for line 9. Enter the tax from the separate Schedule M2MT on line 10.
- Add lines 9 and 10. Enter the total 2025 tax for the S portion on Schedule M2SB, line 11, and include it on Form M2, line 11.
The supplied text does not give a mailing address or e-filing instructions.
Common mistakes
The printed instructions remind filers to avoid these omissions:
- Leaving out Schedule M2SB or the federal computations when filing Form M2.
- Forgetting to include a copy of Schedule KS.
- Omitting an S corporation's name or federal tax ID. If there are more than two corporations, attach a statement with the additional entries.
- Failing to attach the apportionment calculation based on Schedule KS, line 50.
- Not rounding amounts to the nearest whole dollar.
- Failing to complete a separate Schedule M2MT for the S portion.
Questions people ask
What income belongs on Schedule M2SB?
Report all income from the S portion of the ESBT. Line 1 starts with the federal taxable income of the S portion calculated on your federal schedule.
What if the trust holds stock in more than two S corporations?
Include an attached statement listing the additional corporations' names and federal tax IDs.
How do I apportion income, deductions, and modifications?
Use the S corporation's Minnesota apportionment factor reported on Schedule KS, line 50. Include an attachment detailing the calculation.
Where does the final tax amount go?
Add the amounts on lines 9 and 10 and enter the result on Schedule M2SB, line 11. Include that amount on Form M2, line 11.
Where can I find help with lines 12 through 44?
The Schedule M2SB instructions direct you to the instructions for Form M2, lines 44 through 75.