Last week I received a letter from the Minnesota Department of Revenue. When I get a letter from either the State or Federal tax agency, it often feels like I just landed on Chance in Monopoly. You are either going to owe them money, or you are getting a refund. In this case, the letter said that I was due to receive a $372 refund. The letter stated that I was receiving the refund because of a retroactive change in the tax law that was enacted on July 1, 2021. I went to the MN Dept of Revenue website to get more information. The website said that they would be adjusting more than 540,000 Individual Income Tax returns and issuing refunds to taxpayers affected by the UI and PPP changes. UI is unemployment Insurance and PPP is the Paycheck Protection Program. I claimed about 5 weeks of unemployment in 2020, so I figured that was why I was getting the refund.
My unemployment was not caused by the pandemic, but I’m not going to complain about getting an unexpected tax refund. They have a goal of processing 50,000 returns per week by late October. My refund must have been among the first batch of returns. With 540,000 returns to process, it will take about 3 months for them to get through all of the affected returns. The MN Department of Revenue issues more than 2.9 million income and property tax refunds every year. Tax law changes must cause a lot of work for them. I received my property tax refund in August. That refund was reduced by $558. Maybe there is a chance that because of the tax law change that occurred in September, I will get some of that money back? I am not counting on that. My girlfriend also claimed unemployment benefits on her tax return in 2020. She received the additional $600 per week in Federal Pandemic Unemployment Compensation. Because of that, she had a higher amount of unemployment compensation than I did. Initially, we both received a paltry $24 refund on our MN tax returns. Hopefully, she will be getting a second refund too. So, if you claimed unemployment in Minnesota in 2020, there is a good chance that you will received a refund in the next few months.