Minnesota Credit for Military Service in a Combat Zone

Section 290.0677, subdivision 1 gives an individual a credit of $120 for each month or portion of a month spent in active military service in a designated area after December 31, 2008, while a Minnesota domiciliary. Three features make this different from almost every other state military tax provision in this catalog. It is refundable, and the legislature appropriated for it. Subdivision 3 requires the commissioner to refund any excess over the individual's tax liability, and subdivision 4 appropriates an amount sufficient to pay the refunds from the general fund. A service member who owed no Minnesota tax at all in the year still receives the whole amount as cash. It has no income test. Nothing in subdivision 1 or in the definitions in subdivision 2 mentions income, and the phase-out that governs the past military service credit in subdivision 1a is confined to that subdivision. And a portion of a month counts as a whole month. Arriving on the 29th and leaving on the 2nd is two months, at $240. "Designated area" is defined three ways: a combat zone designated by executive order of the President; a qualified hazardous duty area designated in public law; or a location certified by the Department of Defense as eligible for combat zone tax benefits because of direct support of military operations. That third route is the one people miss, because it covers direct support locations that are not themselves inside the combat zone. The current list is printed on the claim form. "Active military service" means active duty service in any of the United States armed forces, the National Guard or the reserves. The claim is made on Form M99, Credit for Military Service in a Combat Zone, or through the Department of Revenue's online application, and it is filed separately from the income tax return. The deadline is three and a half years from the original due date of the return for the year of the qualifying service, which is the same window as an ordinary refund claim, and it is the most common way this credit is lost. Where a service member dies while serving in a qualifying area, the surviving spouse may claim the credit.