Instructions For Form M706 - Estate Tax - Minnesota Department Of Revenue

General Information

(continued)

Who Must Pay?

Payment Options

The executor is responsible for paying the

Minnesota estate tax.

Estate tax can be paid electronically or by check.

However, if the assets were distributed

Pay electronically

without reserving enough to pay the vari-

• Go to our website at and log in to e-Services.

ous taxes, the executor and beneficiaries

are personally responsible for payment to

• If you don’t have Internet access, call 1-800-570-3329.

the extent of the value of assets received

Both options are free and there is no need to register. Enter the decedent’s Social Se-

respectively. (M.S. 270C.585 and M.S.

curity number and follow the prompts for individuals to make an estate tax payment.

291.12)

You’ll need the decedent’s last name, date of birth, date of death and your bank rout-

Deadline for Filing

ing and account numbers. When paying electronically, you must use an account not

associated with any foreign banks.

The regular due date for filing Form M706

is nine months after the date of death.

To be timely, you must complete your transaction and receive a confirmation number

(M.S. 289A.18, subd. 3)

on or before the due date for that payment.

Pay by check

Filing extensions. The automatic extended

due date for filing Form M706 is 15 months

• Go to our website at to create and print a payment

after the date of death or the amount of time

voucher.

granted by the Internal Revenue Service

• Write your check to Minnesota Revenue and mail together to the address on the

(IRS) to file the federal estate tax return,

voucher.

whichever is longer.

Your check authorizes us to make a one-time electronic fund transfer from your

(M.S. 289A.19, subd. 4)

account. You may not receive your cancelled check.

Any tax not paid by the regular due date is

Forms are available from our website at .

subject to penalties and interest (see Penal-

ties on page 2).

The installments — not including interest

5 Determine the number of days from Jan. 1

owed — must be made in equal amounts.

to date of payment.

Deadline for Paying

6 Divide step 5 by 365, and round the result

If you are paying the federal estate tax in

The Minnesota estate tax must be paid no

to five decimal places.

installments and you wish to pay the Min-

later than nine months after the date of

nesota estate tax in installments, check the

7 Multiply step 6 by the interest rate in ef-

death of the decedent. (M.S. 289A.20, subd.

box above line 1.

fect for that year (see Interest on page 3).

8 Multiply step 7 by the tax still due.

Even if you pay the tax in installments, you

If good cause exists, the department may

must pay interest on any tax that remains

9 Add step 4 and step 8. This is the interest

extend the time for payment for a period

unpaid after nine months from the date of

to include with your installment.

of not more than six months. To request a

death of the decedent. The rate of interest on

payment extension, submit your request in

If you fail to make an installment on time,

each installment will be the interest rate in

writing to the department prior to the regu-

you cannot continue to pay the tax in install-

effect during that annual period.

lar due date. (M.S. 289A.30, subd. 2)

ments. Instead, you must pay — within 90

(M.S. 289A.55, subd. 7)

days from the date of the missed installment

It may also be possible to pay the tax in

— the full amount of unpaid Minnesota

The amount of interest to include with each

installments if the estate meets the require-

estate tax, a late payment penalty on the

installment must be figured separately. Fol-

ments explained in Paying Tax in Install-

unpaid tax, plus interest.

low the steps below to determine the interest

ments on the next page.

to include with each installment:

However, if you missed the installment date

Paying Tax in Installments

for what you believe is a reasonable cause,

1 Determine the number of days from the

If the Minnesota estate tax is $5,000 or

write to the Commissioner of Revenue

last payment due date (return or install-

more and the IRS, under IRC sections 6161

explaining why the payment was late.

ment) to date of payment or Dec. 31,

or 6166, has granted the estate an extension

You’ll be notified in writing whether you

whichever is earlier.

of time to pay the federal estate tax, the

may continue to pay Minnesota estate tax in

2 Divide step 1 by 365, and round the result

estate may pay the Minnesota estate tax in

installments. (M.S. 289A.30, subd. 2)

to five decimal places.

installments if the requirements explained

Penalties

below are met.

3 Multiply step 2 by the interest rate in ef-

fect for that year (see Interest on page 3).

Late payment. A late payment penalty will

To be allowed to pay the Minnesota estate

be assessed on any tax not paid by the regu-

4 Multiply step 3 by the tax still due.

tax in installments, the executor must notify

lar payment due date — nine months after

• If the due date is in the same year that

the commissioner in writing no later than

the decedent’s date of death. The penalty is 6

you’re making your payment, stop here.

nine months after the date of death of the

percent of the unpaid tax.

The result in step 4 is the interest you

decedent. The letter must indicate that the

must include with your installment.

estate will pay the Minnesota estate tax in

Continued

• If your payment was due in one year

installments and the dates the payments will

and you’re making the installment in the

be made. The dates must be the same as the

next calendar year, continue with step 5.

dates on which the federal estate tax install-

ments will be made.

Instructions For Form M706 - Estate Tax - Minnesota Department Of Revenue - 2017 Page 2

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