Minnesota’s fifth special session passed a tax and bonding bill conforming to Federal rules relating to Section 179 expensing effective for tax year 2020 and later. Governor Walz signed the bill into law on Wednesday, October 21st. Minnesota will now fully conform to Federal rules related to Section 179 expensing starting in tax year 2020.
The changes also include retroactive conformity (beginning in 2018) for a limited set of “qualifying depreciable property” and affects like-kind exchange property. Qualifying depreciable property is tangible personal property that was acquired in a like-kind exchange during the 2018 and 2019 tax years and which would otherwise have been eligible for Section 179 expensing.
Section 179 depreciation allows taxpayers (Individuals, Corporations, Estates) to deduct their cost for certain equipment up to $1 million in annual Section 179 expense, with a dollar-for-dollar expense phase-out beginning at $2.5 million in acquisitions.
All qualifying individual and business taxpayers can benefit from the section 179 update beginning with the 2020 tax year.
Questions or need assistance with your Section 179 expensing? Visit with one of our experts or call us at (888) 388-1040.