Fillable Schedule M1ed - K-12 Education Credit

2012 Schedule M1ED Instructions

Who is Eligible?

Roth IRA or any pension or annuity that you

• the dollar value of food, clothing, food

You may be able to receive a credit if you paid

funded exclusively, for which your contri-

stamps and medical supplies received from

certain types of education-related expenses in

butions could not be taken as a federal tax

government agencies

2012 for qualifying children in grades kinder-

deduction .)

• payments from life insurance policies

garten through 12 (K–12) . Read the eligibil-

• lump-sum distribution reported on line 1 of

• payments by someone else for your care by a

ity requirements on page 16 of the Form M1

Schedule M1LS

nurse, nursing home or hospital

instructions to determine if you qualify .

• federally nontaxed interest and mutual fund

• fuel assistance payments

dividends

• IRA rollovers

If you are eligible, complete Schedule M1ED .

• income excluded by a tax treaty

• gifts and inheritances

You may claim a credit equal to 75 percent of

• rent reduction received for being a caretaker

• nontaxable Holocaust settlement payments

your actual expenses—up to the maximum

• military or clergy housing allowance

amount—for which you have documentation,

Line 6

• nontaxable military earned income, such as

such as itemized cash register receipts and

The household income limit is based on the

combat pay

canceled checks .

number of qualifying children you have in

• strike benefits

grades K–12 .

Expenses that cannot be used for the credit

• employer paid education or adoption expenses

may be used for the K-12 Education Subtrac-

• the gain on the sale of your home excluded

If your total number

your household

tion (line 19 of Schedule M1M) .

from federal income

of qualifying children

income must be

in K-12 is:

less than:

Penalty for Fraudulently Claiming a Credit

Also include on line 5 the following losses and

1 or 2 . . . . . . . . . . . . . . . $37,500

If you file a return that fraudulently claims a

deductions to the extent they reduced federal

3 . . . . . . . . . . . . . . . . . . $39,500

credit, you will be assessed a penalty equal to

adjusted gross income:

4 . . . . . . . . . . . . . . . . . . $41,500

50 percent of the fraudulently claimed credit .

• health savings account, educator expenses,

5 . . . . . . . . . . . . . . . . . . . $43,500

You Must Have Proof

Archer MSA and domestic production activi-

6 or more . . . . . . . . . . .

Save records (such as itemized cash register

ties deductions

* More than 5 children: $43,500 plus $2,000 for

receipts and canceled checks) of all your educa-

• capital loss carryforward

each additional qualifying child.

tion expenses . You may be asked to show such

• net operating loss carryforward/carryback

records if there is any question concerning

If your household income is more than the

• the amount of a passive activity loss that is

your education credit .

limits shown, you do not qualify for the credit .

not disallowed as a result of Internal Revenue

However, you may qualify for a subtraction .

Code section 469, paragraph (i) or (m) and

Line Instructions

the amount of passive activity loss carryover

Round amounts to the nearest whole dollar.

Line 17

allowed under IRC section 469(b)

The maximum credit you may claim is based

Line 1

• prior year passive activity loss carryforward

on household income and the number of

If your federal adjusted gross income is a net

claimed in 2012 for federal purposes

qualifying children you have in grades K–12 .

loss (a negative amount), enter the negative

• adjustment to federal adjusted gross income

If line 6 is more than $33,500, complete the

number . Put parentheses around the number .

from Schedule M1NC

Worksheet for Line 17 below .

Do not include on line 5:

If you did not file a 2012 federal return, obtain

Line 19

• Minnesota property tax refunds

a federal return and instructions to determine

If your Minnesota gross income is below the

• tuition and fees

what your federal ad justed gross income

filing requirement and you’re filing Form M1

• child support payments

would have been .

to claim this credit, you should have entered

• a dependent’s income, including Social Security

Line 5

zero on line 23 of Schedule M1NR . However,

• any state income tax refunds not included on

Enter the total nontaxable income you re-

to correctly determine this credit, you must

line 1

ceived in 2012 that is not included on lines 1

first fully complete Schedule M1NR to deter-

through 4 . Enter the type(s) of income below

mine what the amounts would have been, and

line 5 .

then follow the Worksheet for Line 19 below .

Worksheet for Line 17 (If Line 6 is More Than $33,500)

Common examples include:

1 Multiply the number of qualifying children in grades K–12 by $1,000 . . . . . . . .

• workers’ compensation benefits

2 Line 6 of Schedule M1ED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• your contributions to an employee elective

$33,500

3 Income limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

deferral plan, such as a 401(k), 403(b), 457

deferred compensation or SIMPLE/SEP plan

4 Subtract step 3 from step 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• contributions made to a dependent care ac-

5 Multiply step 4 by .25 if you have only one qualifying child, or .50 if

count (as shown on your W-2 form) and/or

two or more qualifying children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

medical expense account

6 Subtract step 5 from step 1 (if zero or less, stop here; you don’t qualify) . . . . . . . .

• nontaxable employee transit and parking

Enter the step 6 result on line 17 .

expenses

Worksheet for Line 19

• veterans’ benefits

1 Line 11, column B, of Schedule M1NR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• nontaxable scholarships, fellowships, grants

for education, including those from foreign

2 Line 22, column B, of Schedule M1NR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

sources, and tuition waivers or reductions

3 Subtract step 2 from step 1 (if zero or less, stop here; you don’t qualify) . . . . . . .

• federal subsidies paid to employers for pro-

4 Line 24 of Schedule M1NR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

viding prescription drug coverage for their

5 Divide step 3 by step 4 (carry to five decimal places) . If step 3 is more than step 4,

retirees

enter 1 .0 . Enter result on the space provided on line 19 of Schedule M1ED . . .

• nontaxable pension and annuity payments,

6 Multiply step 5 by line 18 of Schedule M1ED . . . . . . . . . . . . . . . . . . . . . . . . . . . .

including disability payments (However, do

Enter the result from step 6 on line 19 of Schedule M1ED and on line 27 of Form M1 .

not include distributions received from a

Schedule M1ed - K-12 Education Credit - 2012 Page 2

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