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

General Information

(continued)

Reporting Federal Changes

order to evade paying all or part of the tax,

Security number so the department can cor-

you could be charged with a felony. (M.S.

rectly identify you, because you are respon-

If the IRS changes or audits the estate’s fed-

289A.63)

sible for paying the estate tax if the tax is not

eral tax or you amend the federal return, you

paid from the estate’s assets.

must file an amended Minnesota estate tax

Abatement of Penalties

return with the department. The amended

Assembling Required

If circumstances beyond your control pre-

Minnesota estate tax return is due no later

vented you from filing or paying your taxes

Information

than 180 days after you are notified of the

on time, you may request an abatement of

federal changes or the date you filed the

You must attach the following to Form M706

penalties. To request an abatement, send a

amended federal return.

(documents may be double-sided):

letter to the department explaining the spe-

• a completed copy of the federal Form 706,

You must file an amended Minnesota estate

cific events or circumstances that prevented

including all federal schedules (A through

tax return even if the changes do not require

you from filing and/or paying on time. Your

U) that list an amount;

you to amend the federal return. Complete

abatement request must be made within 60

• copies of the wills, property appraisals

a new Form M706 with the appropriate

days after the date you were notified that a

or sales documents, trust agreements,

amended information, and check the box at

penalty has been imposed. (M.S. 270C.34)

disclaimers, financial documents, etc.,

the top of the form to indicate that it is an

If the estate needs more time to meet the

that verify balances and/or stock or bond

amended return. You must attach to your

regular filing due date, the department will

prices;

Form M706, a complete copy of the estate’s

abate the penalties for late filing and late pay-

• a copy of the death certificate;

amended federal return or the correction

ment if the estate meets all of the following

• a completed copy of the Minnesota Form

notice you received from the IRS.

requirements:

M706Q if the qualified small business or

If you received a closing letter, submit a

farm property deduction is being elected;

• Pay a reasonable estimate of the Min-

copy to the department so the estate’s file can

and

nesota estate tax due by the payment due

be closed.

• a completed copy of any Federal gift tax

date. (A payment of at least 90 percent of

returns filed by the decedent covering the

the amount of Minnesota estate tax due as

(M.S. 289A.38, subd. 7)

three years prior to the decedent’s date of

shown on the return is presumed to be a

If you fail to report the federal changes

death.

“reasonable estimate. ” ) Make the extension

within 180 days as required, a 10 percent

payment electronically or mail your check

Other items you must attach to the return

penalty will be assessed on any additional

with a completed payment voucher (see

include:

tax. (M.S. 289A.60, subd. 24)

Payment Options on page 2).

• an itemized list of the gross values of the

Refund of Minnesota Tax

• File Form M706 and pay the remaining tax

decedent’s real and tangible personal

within 15 months of the decedent’s date of

property located outside Minnesota (if

If you overpaid tax or the circumstances of

death.

a resident estate) or in Minnesota (if a

the estate have changed since the Minnesota

nonresident estate). Also, include a list of

estate tax return was filed and you believe all

Interest

the schedule and item number where each

or a portion of the tax already paid should

Interest is calculated as simple interest and

property is listed in the decedent’s federal

be refunded, complete a new Form M706

accrues on unpaid tax and penalties begin-

return.

and check the box to show it is an amended

ning nine months from the decedent’s date

return. Be sure to enter on line 14 any tax,

• a completed payment voucher, if you’re

of death. Interest will be charged even if

penalty and interest you’ve already paid.

paying the tax due by check with the Form

the deadline for filing the return has been

On line 19 enter the refund amount. (M.S.

M706.

extended or the tax is being paid under an

289A.50, subd. 1)

Preferred method. To attach, be sure to

installment plan. The rate of interest may

use binder clips, 3-ring binders or 2-prong

Claims for refund must be filed within 3½

change from year to year. (M.S. 270C.40)

fasteners. Do not use bindings, staples or

years from the due date for filing the return,

The interest rate for 2016 is 3 percent.

colored paper as separators.

plus any extension of time granted for fil-

ing the return but only if filed within the

Use of Information

Alternative method. Save all forms,

extended time. (M.S. 289A.40, subd. 1)

documents and attachments using the PDF

Information requested for filing estate tax is

format, and store on a CD. Label the CD

required under state law (M.S. 289A.10, subd.

The estate will be paid interest on the

with the decedent’s name (last, first, middle

2).

amount refunded. (M.S. 289A.56, subd. 3)

initial), date of death and Social Security

All information you enter on the return is

Income Tax Return for Estates

number (last four digits). Submit the CD

private under state law. It cannot be given

along with a printed copy of Form M706,

If the estate’s assets generate $600 or more

to others without your consent except to

the first three pages of federal Form 706, the

of Minnesota gross income, you must file

the IRS, other Minnesota state agencies and

death certificate and an index page listing the

Form M2, Income Tax Return for Estates and

other state governments that are authorized

documents.

Trusts, with the department.

by law to receive the information and must

Where to file. Use one of the mailing labels

Form M2 corresponds to the federal Form

treat the information as private.

provided on page 7 to mail your Form M706

1041, United States Income Tax Return for

The decedent’s Social Security number is

and all required attachments to the depart-

Estates and Trusts, and is due April 15 or the

required by M.S. 270C.306. Although your

ment. If you choose not to use the label, mail

15th day of the fourth month following the

— the executor’s — Social Security number

your forms to: Minnesota Estate Tax, Mail

end of the tax year.

is requested on Form M706, you are not

Station 1315, St. Paul, MN 55146-1315.

required to provide it. We ask for your Social

Continued

Instructions For Form M706 - Estate Tax - Minnesota Department Of Revenue - 2016 Page 3

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