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

General Information

(continued)

Paying Tax in Installments

Payment Options

If the Minnesota estate tax is $5,000 or more

and the IRS, under IRC sections 6161 or

Estate tax can be paid electronically or by check.

6166, has granted the estate an extension of

time to pay the federal estate tax, the estate

Pay electronically

may pay the Minnesota estate tax in install-

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

ments if the requirements explained below

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

are met.

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

To be allowed to pay the Minnesota estate

Security number and follow the prompts for individuals to make an estate tax pay-

tax in installments, the executor must notify

ment. You’ll need the decedent’s last name, date of birth, date of death and your

the commissioner in writing no later than

bank routing and account numbers. When paying electronically, you must use an

nine months after the date of death of the

account not associated with any foreign banks.

decedent. The letter must indicate that the

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

estate will pay the Minnesota estate tax in

ber on or before the due date for that payment.

installments and the dates the payments will

Pay by check

be made. The dates must be the same as the

dates on which the federal estate tax install-

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

ments will be made.

voucher.

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

The installments — not including interest

the voucher.

owed — must be made in equal amounts.

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

If you are paying the federal estate tax in

account. You may not receive your cancelled check.

installments and you wish to pay the Min-

nesota estate tax in installments, check the

Forms are available from our website at .

box above line 1.

8 Multiply step 7 by the tax still due.

tax due no later than 15 months after the

Even if you pay the tax in installments, you

decedent’s death. Make your extension pay-

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

must pay interest on any tax that remains

ment electronically or mail your check with

to include with your installment.

unpaid after nine months from the date of

a completed payment voucher (see Payment

death of the decedent. The rate of interest

If you fail to make an installment on time,

Options on page 2). If you made an extension

on each installment will be the interest rate

you cannot continue to pay the tax in install-

payment, include the amount you paid on

in effect during that annual period. (M.S.

ments. Instead, you must pay — within 90

line 12 of Form M706. (M.S. 289A.60, subd.

289A.55, subd. 7)

days from the date of the missed installment

— the full amount of unpaid Minnesota

The amount of interest to include with each

Federal extension for paying tax. If you

estate tax, a late payment penalty on the

installment must be figured separately. Fol-

received an extension to pay federal estate

unpaid tax, plus interest.

low the steps below to determine the inter-

tax or you have properly elected under IRC

However, if you missed the installment date

est to include with each installment:

section 6166 to pay federal tax in install-

for what you believe is a reasonable cause,

ments, you will not be assessed a late pay-

1 Determine the number of days from the

write to the Commissioner of Revenue

ment penalty on any Minnesota estate tax

last payment due date (return or install-

explaining why the payment was late. You’ll

not paid by the regular due date. Attach to

ment) to date of payment or Dec. 31,

be notified in writing whether you may

your Minnesota M706 return a copy of the

whichever is earlier.

continue to pay Minnesota estate tax in

federal approval for extending payment of

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

2 Divide step 1 by 365, and round the result

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

to five decimal places.

Penalties

Late filing. If you file the return after the

3 Multiply step 2 by the interest rate in ef-

Late payment. A late payment penalty will

extended filing due date, a late filing penalty

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

be assessed on any tax not paid by the regu-

will be assessed on the unpaid tax. The

4 Multiply step 3 by the tax still due.

lar payment due date — nine months after

penalty is 5 percent of the unpaid tax. (M.S.

• If the due date is in the same year that

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

289A.60, subd. 2)

you’re making your payment, stop here.

percent of the unpaid tax.

Failing to file with intent to evade tax

The result in step 4 is the interest you

If you file your Minnesota estate tax return

or filing a false or fraudulent return. A

must include with your installment.

after the regular filing due date — nine

penalty of 50 percent of the tax due is added

• If your payment was due in one year

months after the decedent’s date of death

to the tax if you fail to file or file a false

and you’re making the installment in the

— and you don’t pay the tax as reported on

or fraudulent return with intent to evade

next calendar year, continue with step 5.

your return at the time you file, an additional

payment of the Minnesota estate tax. This

5 Determine the number of days from Jan.

5 percent late payment penalty will be as-

penalty is in addition to any other penalties

1 to date of payment.

sessed on the unpaid tax.

that may apply. (M.S. 289A.60, subd. 6)

6 Divide step 5 by 365, and round the result

To avoid a late payment penalty, you must

Criminal penalties. If you willfully fail to

to five decimal places.

pay at least 90 percent of the total Min-

file a return in order to evade paying the tax,

7 Multiply step 6 by the interest rate in ef-

nesota estate tax by the regular due date

you could be charged with a gross misde-

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

and file Form M706 and pay the remaining

meanor. If you file a fraudulent return in

Continued

Instructions For Form M706 - Estate Tax - Minnesota Department Of Revenue - 2016 Page 2

Related Articles

Related forms

Related Categories