2023 Partnership Form M3 Instructions 

                                                                             What’s New for 2023 
Contents                                                                     Federal Conformity 
General Information   ..... ......  1-4 
                                                                             Minnesota law was updated to generally adopt the Internal Revenue Code (IRC) as amended 
Filing Requirements  . ...... ..  1-2                                        through May 1, 2023. The 2023 Minnesota income tax forms incorporate federal law through 
Before You File   ..... ...... ....  1                                       this IRC date. 
Due Dates and Extensions  . . . . . .             2 
Payment Options   ... ...... ....  2                                         Delayed Business Interest Deduction Subtraction 
Penalties and Interest ... ...... .  3                                       The new delayed business interest deduction allows a subtraction for 1/5th of the amount of the 
Filing Reminders  ... ...... ...  3-4                                        nonconformity adjustment additions required as a result of the CARES Act Section 2306. For 
M3 Instructions  ... ...... ......  5-8                                      more details, see page 13. 
M3A Instructions                             . . . . . . . . . . . . .  9-10 Housing Tax Credit 
KPI Instructions   .. ..... ......  11-16                                    The new Housing Tax Credit is a nonrefundable credit for qualifying contributions to a state 
KPC Instructions ... ...... ....  17-19                                      fund. To be eligible for the credit, you must apply to the Minnesota Housing Finance Agency 
Mailing Label... ...... ...... .... 19                                       (MHFA) and receive a credit certificate. For more details, visit the MHFA website at www. 
                                                                             mnhousing.gov. 
Questions?                                                                   Short Line Railroad Infrastructure Modernization Credit 
You can find forms and                                                       The new Short Line Railroad Infrastructure Modernization Tax Credit is a nonrefundable credit 
information, including answers to                                            for railroad reconstruction or replacement expenditures of a Class II or Class III railroad. For 
frequently asked questions and                                               more details, see Schedule RAIL. 
options for filing and paying                                                                                                                       
                                                                             Credit for Sales of Manufactured Home Parks to Cooperatives
electronically, on our website at: 
                                                                             The new Credit for Sales of Manufactured Home Parks to Cooperatives is a nonrefundable 
www.revenue.state.mn.us                                                      credit for 5% of the amount of the sale. For more details, see Schedule MHP. 
Send us an email at:                                                                                                              
                                                                             Global Intangible Low-Taxed Income (GILTI)
businessincome.tax@state.mn.us                                               Minnesota generally conforms to the federal treatment of GILTI (but not the federal section 250 
Call us at 651-556-3075                                                      deduction) and repeals the related Minnesota income tax subtraction modifications. GILTI is 
                                                                             treated as dividend income for the purposes of the corporate dividends received deduction and 
Need Forms?                                                                  the sales factor. 
Go to  www.revenue.state.mn.us. 
                                                                             Pass-Through Entity (PTE) Tax 
This information is available in 
                                                                             The PTE tax was changed in the following ways: 
alternate formats. 
                                                                             •  Expands eligibility by allowing partial elections if not all owners are qualifying owners. 
Before You File                                                              •  Requires 100% allocation to Minnesota for resident partners. 
Complete Your Federal Return                                                 •  Removes the requirement that one qualifying owner must be subject to the limitation on state 
Before you complete Form M3,                                                   and local taxes (SALT Cap). 
complete federal Form 1065 and                                               • Clarifies eligibility for a single member limited liability company (LLC) if the LLC is taxed   
supporting schedules. You will need to                                         as a partnership or S corporation. 
reference them.                                                              • Requires partnerships with federal audit adjustments to file an amended Schedule PTE.    
Minnesota Tax ID Number                                                      For more details, see Schedule PTE and Schedule PTE-RP. 
Your Minnesota tax ID is the seven-
digit number you’re assigned when you                                        Nonresident Withholding and PTE Tax Refunds 
register with the department. Generally,                                     Overpayments of nonresident withholding tax and PTE tax are limited to the amount of the 
this is the same as your sales and use tax                                   overpayment that was not deducted or withheld from the shares of the partners or shareholders. 
or Minnesota employer’s withholding 
tax number. It’s important to include                                        Filing Requirements
your Minnesota tax ID on your return                                         All entities required to file a federal Form 1065, U.S. Return of Partnership Income, and have 
so that any payments you make are                                            Minnesota gross income must file Form M3, Partnership Return. The entire share of an entity’s 
properly credited to your account.                                           income is taxed to the partner/member, whether or not it is actually distributed. Each partner/ 
                                                                             member must include their share of income on their tax return. However, the minimum fee is 
If you don’t have a Minnesota tax                                            paid by the entity. 
ID, apply for one online at www. 
revenue.state.mn.us and type Business                                        An S corporation must use Form M8,      S Corporation Return. 
Registration in the search box or call                                       If you are a single-member LLC, the form you must use depends on what kind of entity your 
651-282-5225 or 1-800-657-3605.                                              business is for federal tax purposes. 
                                                                                                                                                                Continued1

General Information (Continued) 

Minimum Fee 
A partnership is subject to a minimum fee if the sum of its Minnesota source property, payroll and sales or receipts is at least $1,160,000. 
However, the partnership is exempt from the minimum fee if more than 80% of its income is from farming. 
The minimum fee is determined on M3A, which is page 3 of Form M3. 

File Electronically
Options are available to electronically prepare and file your partnership tax return. Electronic filing is a secure, fast and easy way to file. For 
more information, go to our website at www.revenue.state.mn.us. 

Due Dates and Extensions 
Your Minnesota return and payment are due the same date your federal return and payment are due. 
If the due date lands on a weekend or legal holiday, returns and payments electronically made or postmarked the next business day are 
considered timely. 
Extension of Time to File 
All partnerships are granted an automatic six-month extension to file Form M3, if the tax payable for the year is paid by the regular due date. 
However, if the IRS grants an extension of time to file your federal return that is longer than the Minnesota automatic six-month extension, 
your state filing due date is extended to the federal due date. 
This is a filing extension only. To avoid penalties, you must make an extension tax payment by the regular due date. (SeeExtension Payment 
below.) 

Payments
There are four types of partnership tax payments—extension, estimated tax, tax return and amended return payments. You can pay 
electronically, by credit card or by check. (See Payment Options below.) 
Note: If you’re currently paying electronically using the ACH credit method, continue to call your bank as usual. If you wish to make 
payments using the ACH credit method, instructions are available on our website at www.revenue.state.mn.us. 
Extension Payment 
Your tax is due by the regular due date, even if you are filing under an extension. Any tax not paid by the regular due date is subject to 
penalties and interest (see lines 18 and 19 on pages 6 and 7). 
If you’re filing after the regular due date, you can avoid penalties and interest by making an extension payment by the regular due date. (See 
Payment Options above.) If you’re not required to pay electronically and are paying by check, go to www.revenue.state.mn.us to create a 
voucher to print and submit with your check. 
Estimated Tax Payments 
A partnership must make quarterly estimated tax payments if the sum of its estimated minimum fee, nonresident withholding, pass-through 
entity tax, and composite income tax for all nonresident partners electing to participate in composite income tax, less any credits, is $500 or 
more. A partnership is not required to pay estimated taxes the first year it is subject to tax in Minnesota. 

Payment Options 
If you’re required to pay any Minnesota business tax electronically, you must pay all taxes electronically. A 5% penalty will be  
assessed if you fail to do so when required. 
   Pay Electronically 
  Go to www.revenue.state.mn.us and log in. To be timely, you must complete your transaction and receive a confirmation number on or before 
  the due date for that payment. You can cancel a payment up to one business day before the scheduled date, if needed. When paying electroni-
  cally, you cannot use a foreign bank. 
  If you’re using the system for the first time and need a temporary password, call 651-282-5225 or 1-800-657-3605. 
   Pay by Credit or Debit Card 
  Go to www.revenue.state.mn.us, and select Make a Payment. Select Credit or Debit Card. Your payment will be processed by a third-party 
  vendor. The vendor charges a fee for the service. 
  Pay by Check 
  Go to www.revenue.state.mn.us and select Make a Payment. Select Check. Use the Payment Voucher System to create a voucher.  
  Your check authorizes us to make a one-time electronic fund transfer from your account. You will not receive your canceled check. 
                                                                                                                     Continued                  2 

General Information (Continued) 

The required annual payment is the lesser of: 
  •  90% of the current year’s tax liability 
  •  100% of the prior year’s liability. 
The required annual payment must be paid in four equal installments unless certain exceptions apply (see the instructions for Schedule EST, 
Additional Charge for Underpayment of Estimated Tax). 
Payments are due by the 15th day of the fourth, sixth and ninth months of the tax year and the first month following the end of the tax year. If 
the due date lands on a weekend or legal holiday, payments electronically made or postmarked the next business day are considered timely. 
Installments for a short tax year are due in equal payments on the 15th day of the third, sixth, ninth, and final months of the tax year of the tax 
year depending on the number of months in the short tax year. No installments are required are due for a tax year of fewer than four months. 
If estimated tax is required for the minimum fee, pass-through entity tax, composite income tax and/or nonresident withholding, include all 
on the same quarterly payments. 
To make an estimated payment, see Payment Options on page 2. 
Tax Return Payment 
If line 21 of Form M3 shows an amount due, you must make a tax return payment (see Payment Options on page 2). If you’re not required to 
pay electronically and are paying by check, go to www.revenue.state.mn.us to create a voucher to print and submit with your check. 

Penalties and Interest 
Late Payment.  A late payment penalty is assessed on any tax not paid by the regular due date. The penalty is 6% of the unpaid tax. 
If you file your return after the regular due date with a balance due, and you do not pay that balance, an additional 5% penalty will be 
assessed on the unpaid tax. 
Late Filing. There is also a penalty if you file after the extended due date and owe tax. The late filing penalty is 5% of any tax not paid by the 
regular due date. 
Interest. You must also pay interest on the penalty and tax you are sending in late. The interest rate for 2024 is 8%. 
Other Penalties. There are also civil and criminal penalties for intentionally failing to file a Minnesota return, evading tax and for filing a 
frivolous, false or fraudulent return. 

Filing Reminders
Accounting Period 
You must use the same accounting period for Minnesota as you use for your federal return. If you change your federal accounting period, 
attach a copy of federal Form 1128, Application to Adopt, Change or Retain a Tax Year, to your short-period Minnesota return. 
Pass-Through Entity Tax 
A partnership may elect to file and pay income tax, on behalf of its partners, based on the entity’s income at the entity level. See Schedule PTE, 
Pass-through Entity Tax, for information on the election. 
If you are filing and paying PTE tax at the entity level, check the box for the PTE tax on the front of Form M3 and see the line 2 instructions 
on page 5. 
Composite Income Tax 
A partnership, not making a PTE election, may pay composite Minnesota income tax on behalf of its eligible nonresident individual partners 
or grantor trusts who elect to be included in lieu of each partner filing their own Minnesota return. The electing individuals must not have any 
Minnesota source income other than the income from this partnership and other entities for which they are electing composite tax or are a part 
of a PTE tax return. 
Partners who receive a share of gross profit or income from an installment sale reported on line 7a or 7b of Schedule KPI, Partner’s Share of 
Income, Credits and Modifications, are not eligible to elect the partnership to pay composite income tax on their behalf. 
If you are paying composite income tax for your electing partners, check the box for composite income tax on the front of Form M3 and see 
the line 3 instructions on page 5. 
Nonresidents included in composite income tax are not subject to the nonresident withholding requirements (see the next section). 
Nonresident Withholding 
Partnerships are required to withhold and remit Minnesota income tax for a nonresident individual partner if: 
  • The partner has a legal residence that is not in Minnesota 
  •  The partner is not included in composite income tax 
    • The partnership is not electing to file and pay PTE tax 
  •  The partner has Minnesota distributive income of $1,000   or more from this partnership 
  •  The partner has income that was not generated by a transaction related to the termination or liquidation of the partnership in which no cash 
    or property was distributed in the current or prior taxable year 
                                                                                                                          Continued             3 

General Information (Continued) 

If the partnership elected PTE tax, the partnership is not required to withhold for a nonresident partner. The nonresident partner may still be 
required to file an income tax return if they meet the minimum filing requirement  ($13,825 for 2023) and the PTE tax does not satisfy their 
filing requirement. 
Withholding is not required on income from the discharge of a debt.  Income from the gain on sale of property that has been subject to a basis 
reduction under sections 108, 734, or 743 of the Internal Revenue Code that was subject to a mortgage is excluded from withholding to the 
extent that no cash is received, or the cash is required to pay the indebtedness or mortgage. 
If you’re required to pay nonresident withholding, see the line 4 instructions on page 5. 
Note: Nonresident individual partners include grantor trusts that file or can file under Treasury Regulation 1.671-4(b) and single-member 
LLCs when the single member is an individual. 
Exempt Partnerships: If the partnership’s ownership interests are traded on a public exchange, the partnership is not required to withhold 
and remit Minnesota taxes for its nonresident partners. 
Nonresident Entertainers: Compensation paid to a nonresident entertainment entity for performances in Minnesota is not subject to 
Minnesota income tax. Instead, the compensation is subject to a 2% withholding tax on the gross compensation the entertainment entity 
reported for performances in Minnesota. 
A partnership is an entertainment entity if it is paid compensation for entertainment provided by entertainers who are partners. An entertainer 
includes, for example, a musician, singer, dancer, comedian, thespian, athlete or public speaker. If you are defined by law as an entertainment 
entity, file Form ETR, Nonresident Entertainer Tax Return, by April 15 of the following year the income was received. For additional 
information, see Withholding Fact Sheet 11, Nonresident Entertainer Tax. 
If you are an entertainment entity that received compensation for performances in Minnesota and have no other type of Minnesota income, 
you are not required to file Form M3. 

Use of Information 
All information on this form is private, except for your Minnesota tax ID number, which is public. Private information cannot be given to 
others except as provided by state law. 
The identity and income information of the partners are required under state law so the department can determine the partner’s correct 
Minnesota taxable income and verify if the partner has filed a return and paid the tax. The Social Security numbers of the individual partners 
are required under M.S. 289A.12, subd. 13. 

Assembling Paper Tax Forms
Your return should be assembled in the following order: Form M3, Schedule PTE, Schedules KPI, Schedules KPC, finally your Federal 
return and its schedules. All schedules of the same type should be grouped together. Do not staple or tape any enclosures to your return. 

Where to File Paper Returns
Mail Form M3 and all completed Minnesota and federal forms and schedules using a mailing label (see page 19). 
If you choose not to use the label, mail your forms to: 
Minnesota Partnership Tax 
Mail Station 1760 
600 N. Robert Street 
St. Paul, MN 55146-1760 
Partnerships with more than 200 partners are asked to submit federal Schedules K–1 and Minnesota Schedules KPI and KPC (if applicable) 
on CDs or flash drives. The department will continue to accept the filing of paper copies if this is not possible. 

Reporting Federal Changes
If the Internal Revenue Service (IRS) changes or audits your federal return or you amend your federal return, you must amend your 
Minnesota return. File your Form M3X, Amended Partnership Return, withinn 180 days after you were notified by the IRS or after you filed 
your federal amended return. Enclose a copy of the IRS report or your amended federal return with your amended Minnesota return. 
If you want to elect to report and pay the Minnesota income tax, penalty, and interest resulting from a federal BBA centralized partnership 
audit change on behalf of your partners, see Schedule M3BBA for more details. 
If you fail to report as required, a 10% penalty will be assessed on any additional tax. 

                                                                                                                                                4 
                                                                                                                   Continued 

Completing Form M3 

Before you file Form M3, you must complete the following: 
  •  Federal Form 1065 and supporting schedules 
   • Schedule KPI for each nonresident partner, any Minnesota resident partner who has adjustments to income, and all partners who are an 
   individual, estate, or grantor trust that is a disregarded entity owned by an individual U.S. citizen if the partnership elected PTE tax (see 
   page 11) 
   • Schedule KPC for each corporate or partnership partner (see page 17) 
Check Boxes 
Initial Return. If this is the partnership’s first return filed in Minnesota, check the box on the front of the form. 
Composite Income Tax. If you are paying composite income tax for your electing partners, check the box for composite income tax on the 
front of Form M3 and see the instructions for line 3. 
Limited Liability Company (LLC). A limited liability company that is considered to be a partnership for federal income tax purposes is 
considered a partnership for Minnesota purposes, and the members are considered to be partners. If you are a limited liability company and 
are filing a partnership return, check the LLC box on the front of Form M3. 
Final Return. If the partnership is out of business and/or is not required to file Form M3 in future years, check the “Out of Business” box on 
the front of the form. 
Installment Sale of Pass-through Assets or Interests. Check the “Installment Sale of Pass-through Assets or Interests” box if the partnership 
did any of the following: 
1) executed an installment sale, after December 31, 2016, of partnership interests being reported on federal Form 6252 
2) executed an installment sale, after December 31, 2016, of the assets of a partnership and is reporting the sale on federal Form 6252 
3) owns an interest in a partnership, or trust reporting installment sale gains on line 7 of Schedule KPI, line 6 of Schedule KF, or line 10 of 
   Schedule KPC 
If you are required to check the Installment Sale of Pass-through Assets or Interests, also complete line 7 of all applicable Schedules KPI, and 
line 10 of all applicable Schedules KPC to report installment sale information to your partners. 
Public Law 86-272. Check this box to indicate you are claiming to be exempt from Minnesota income tax under Public Law 86-272. 
Pass-Through Entity (PTE) Tax. Check this box if the partnership is electing to pay PTE tax at the entity level on behalf of their partners. 
Include Schedules PTE and PTE-RP with Form M3. 
Tax Position Disclosure. If you filed Form TPD to disclose items or positions that are not otherwise adequately disclosed on your return. See 
Form TPD for more details. 

Line Instructions 
Round amounts to whole dollars. Decrease amounts less than 50 cents and increase amounts 50 cents or more to the next higher dollar. 
Partnership Partners: When completing Form M3 and Schedules KPI and KPC, include any amounts reported on the Schedule KPC you 
received as a partner of a partnership (include Schedule KPC with your return). 
M3, line 1—Minimum Fee 
Complete M3A of Form M3 to determine the minimum fee to enter on line 1. See the M3A instructions beginning on page 9. 
You are exempt from the minimum fee if more than 80% of your income is from farming. 
M3, line 2—Pass-Through Entity Tax 
Complete Schedule PTE to elect and determine the amount of tax to enter on line 2. Include Schedules PTE and PTE-RP with Form M3. with 
your return filing. 
M3, line 3—Composite Income Tax 
To determine line 3, you must first figure the amount of composite tax attributed to each electing partner. See the partnership instructions for 
lines 50 and 51 of Schedule KPI on page 15. 
Add the composite income tax attributed to all electing partners (the total of lines 51 from all KPI schedules), and enter the result on line 3 of 
Form M3. 
M3, line 4—Nonresident Withholding 
To determine line 4, you must first figure the amount to withhold for each nonresident individual partner. See the partnership instructions for 
line 52 of Schedule KPI on page 16. 
Add the withholding required for all nonresident partners (the total of lines 52 from all KPI schedules), and enter the result on line 4 of  
Form M3. 

If you received a signed and dated Form AWC, Alternative Withholding Certificate, from one or more partners, check the box provided on           5 
line 4 of Form M3. You must include the certificate(s) when you file your return.                                      Continued 

Completing Form M3 (Continued) 

M3, line 6—Employer Transit Pass Credit
If you provided transit passes at a reduced cost to your employees for use in Minnesota, complete and enclose Schedule ETP, Employer 
Transit Pass Credit, to determine your credit. 
Enter the amount of the credit that is being claimed directly by the partnership and not passed through to partners. 
M3, line 7—Film Production Tax Credit 
If you received a credit certificate from the Department of Employment and Economic Development (DEED) for eligible production costs, 
enter the credit amount on line 7 and the certificate number in the space provided. 
Enter the amount of the credit that is being claimed directly by the partnership and not passed through to partners. If you have multiple 
credits, enter the certificate number your partnership received directly from DEED within the certificate number box. If you have multiple 
credits and received all credits from other pass-through entities, enter the certificate number relating to the largest credit amount within the 
certificate number box. Subtotal all credit amounts on line 7. Include a statement showing the certificate number and corresponding credit 
amounts for all credits you included on line 7. 
For more details regarding this tax credit, go to the DEED website at mn.gov/deed. 
M3, line 8—Tax Credit for Owners of Agricultural Assets
If you received a credit certificate from the Minnesota Rural Finance Authority for selling or leasing agricultural assets to a beginning farmer, 
enter the certificate number in the space provided and credit amount on line 8. 
If you have multiple credits, enter the certificate number your partnership received directly from the Rural Finance Authority within the 
certificate number box. If you have multiple credits and received all credits from other pass-through entities, enter the certificate number 
relating to the largest credit amount within the certificate number box. Subtotal all credit amounts on line 8. Include a statement showing the 
certificate number and corresponding credit amounts for all credits you included on line 8. 
M3, line 9—Housing Tax Credit 
If you received a certificate from the Minnesota Housing Finance Agency (MHFA) for qualifying contributions to a state fund, enter the credit 
amount on line 9 and the certificate number in the space provided. 
You may carry any unused credit forward for up to 10 years. 
For more details regarding this tax credit, go to the MHFA website at www.mnhousing.gov. 
M3, line 10—Short Line Railroad Infrastructure Modernization Credit 
You may be eligible for the nonrefundable Short Line Railroad Infrastructure Modernization Credit if the partnership operates as a Class II or 
Class III Railroad. 
If you qualify, complete Schedule RAIL, Short Line Railroad Infrastructure Modernization Credit. Enter the credit amount on line 10. 
You may carry any unused credit forward for up to five years or transfer the unused credit to one other taxpayer. To transfer the credit, 
complete the Assignment Form on Schedule RAIL. 
M3, line 11—Credit for Sales of Manufactured Home Parks to Cooperatives 
You may be eligible for the nonrefundable Credit for Sales of Manufactured Parks to Cooperatives if the partnership sold a manufactured 
home park to a cooperative. 
If you qualify, complete Schedule MHP, Credit for Sales of Manufactured Home Parks to Cooperatives. Enter the credit amount on line 11. 
You may carry any unused credit forward for up to 5 years. 
M3, line 14—Enterprise Zone Credit
If your business has been certified and approved by the Department of Employment and Economic    Development   (DEED) as employment 
property in an enterprise zone, enter the credit that is being claimed directly by the partnership and not passed through to the partners. Attach 
the certification document received from the DEED. 
For details about the zones, go to the DEED website at mn.gov/deed. 
M3, line 15—Estimated Tax and Extension Payments 
Enter your total prepayments, including any of the following: 
  •  your total 2023 estimated tax payments made in 2023 and 2024, paid either electronically or by check 
   • any 2023 extension payment, paid electronically or by check, that was made by the due date when filing under an extension 
  •  the portion of your 2022 refund applied to your 2023 estimated tax 
M3, line 18—Penalty 
Penalties are collected as part of the tax and are in addition to any additional charge for underpaying estimated tax. If you are paying your tax 
after the regular due date, include the appropriate penalties on line 18. 
Late Payment.  If the tax is not paid by the regular due date, a penalty is due of 6% of the unpaid tax on line 17. 
                                                                                                                                                  6 
                                                                                                                      Continued 

Completing Form M3 (Continued) 

Late Filing. If you are filing your return after the extended due date and owe tax, you must pay a late filing penalty. The late filing penalty is 
5% of the unpaid tax on line 17. 
Balance Not Paid. If you file your return after the regular due date and have a balance due, and that tax is not remitted with the return, an 
additional penalty is assessed. The additional penalty is 5% of the unpaid tax on line 17. 
Payment Method. If you are required to pay electronically and do not, an additional 5% penalty applies to payments not made electronically, 
even if your paper check is sent on time. 
If, during the 12 months ending June 30 of the tax year, you paid $10,000 or more in estimated tax payments, you are required to make all 
future estimate tax payments electronically beginning January 1 of the following tax year. Once you meet the electronic payment threshold, 
you are required to pay electronically for all future periods. 
You must also pay electronically if you’re required to pay any Minnesota business tax electronically, such as sales or withholding tax. 
M3, line 19—Interest 
You must pay interest on the unpaid tax and penalty from the regular due date until the total is paid. The interest rate for calendar year 2024 is 
8%. 
To figure how much interest you owe, use the following formula with the appropriate interest rate: 
 Interest = (tax + penalty) x # of days late x interest rate ÷ 365 
M3, line 20—Additional Charge for Underpayment of Estimated Tax 
If you did not pay the correct amount of estimated tax by the due dates, you may have to pay an additional charge for underpaying or not 
paying estimated tax. 
You may also owe an additional charge if the following is more than $500: 
   •  Line 5 
   •  Less any credits on lines 6 through 11, and 14 
Complete Schedule EST, Underpayment of Estimated Income Tax, to determine the additional charge for underpaying estimated tax. 
Enter the total charge, if any, on line 20. Enclose the schedule with your return. 
M3, line 21—Amount Due 
Add lines 17 through 20. This is the amount you owe. Check the appropriate box on line 21 to indicate your method of payment. See Payment 
options on page 2. 
M3, line 22—Overpayment 
If line 16 is more than the sum of lines 13 and 18 through 20, subtract the sum of lines 13 and 18 through 20 from line 16. 
If you have an overpayment on line 22, you may choose to have it direct deposited into your bank account. You may also choose to apply all 
or a portion of your overpayment toward your 2024 estimated tax account. 
M3, line 23—2024 Estimated Tax 
Skip this line if you owe additional tax. 
If you are paying 2024 estimated tax, you may apply all or a portion of your refund to your 2024 estimated tax. Enter the portion of line 19 
you want to apply toward your 2024 estimated tax on line 23. 
M3, line 24—Refund 
If you want to request your refund to be direct deposited into your bank account, complete line 25. Your bank statement will indicate when 
your refund was deposited to your account. Otherwise, skip line 25 and your refund will be sent to you in the mail. 
M3, line 25—Direct Deposit of Refund 
If you want your refund to be directly deposited into your checking or savings account, enter the routing and account numbers. You must use 
an account not associated with any foreign banks. 
                                                                                                   You can find your bank’s routing number and  
The routing number must have nine digits.                                                          account number on the bottom of your check. 
The account number may contain up to 17 digits (both numbers and letters). Enter the number 
and leave out any hyphens, spaces and symbols. 
If the routing or account number is incorrect or is not accepted by your financial institution, 
your refund will be sent to you in the form of a paper check. 
By completing line 25, you are authorizing the department and your financial institution to initiate electronic credit entries, and if necessary, 
debit entries and adjustments for any credits made in error. 
                                                                                                                                                   7 

Completing Form M3 (Continued) 

Signature
The return must be signed by a partner or LLC member of the firm. 
If you paid someone to prepare your return, the preparer must also sign and provide their Preparer Tax Identification Number (PTIN) and 
phone number. Check the box to authorize the department to discuss this return with the preparer. This authority allows us to discuss with 
your preparer these items from this return: line item details; tax due on original and adjustments made during processing; penalty or interest 
due; documents received or sent like a tax order or bill; and dates and amounts of payments, credits, or refunds. The authority also allows 
your preparer to cancel direct deposit or debit payments and submit an abatement request. 
The authority granted by a marked return checkbox is valid for one year after the due date for current original returns, or one year from the 
date the form was submitted for amended and noncurrent original returns. 
Checking the box does not give your preparer the authority to sign any tax documents on your behalf, represent you at any audit or appeals 
conference, or discuss abatement progress. For these types of authorities, you must file Form REV184b, Business Power of Attorney, with the 
department. 
Email Address 
If the department has questions regarding your return and you want to receive correspondence electronically, indicate the email address below 
your signature. Check a box to indicate if the email address belongs to an employee of the partnership, the paid preparer or other contact 
person. 
By providing an email address, you are authorizing the department to correspond with you or the designated person over the Internet and you 
understand that the entity’s nonpublic tax data may be transmitted over the Internet. 
You also accept the risk that the data may be accessed by someone other than the intended recipient. The department is not liable for any 
damages that the entity may incur as a result of an interception. 

                                                                                                                                               8 

Completing Form M3A 

Complete M3A to determine your Minnesota source income and minimum fee. 

Apportionment Factor 
Minnesota is a 100% sales apportionment state. 
The minimum fee still takes into account your Minnesota portion of property, payroll, and sales. 

Petitioning to Use Another Method of Allocation
State law (M.S. 290.20, subd. 1a and Minnesota Rules 8020.0100, subp. 3) allows entities to request permission from the department to 
allocate all, or any part of, taxable net income in a manner other than the statutory single sales factor apportionment formula. 
To request permission, complete Form ALT, Petition to Use Alternative Method of Allocation (see Revenue Notice 04-07). 
Permission will be granted only if you can show that the sales-factor formula does not properly and fairly reflect your Minnesota income, and 
that the alternative formula you have chosen does. 

Property Factor
Enclose the completed federal Schedule L (federal Form 1065) or a copy of the partnership’s balance sheet with your Form M3. 
The property factor consists of tangible property which includes land, buildings, machinery, equipment, inventories and other tangible 
personal property valued at original cost. 
Original cost is your cost or original basis when you acquired the property. Depreciation and fair market value are not considered. 
M3A, lines 1a–1c 
In column A, lines 1a-1c, enter the total property items for your entire business in Minnesota. 
Line 1a. Add the beginning and the ending year inventories, divide by two and enter the result on line 1a. This is your average value of 
inventory. 
Line 1b. Add the beginning and ending year values of the buildings, machinery, equipment and other tangible property and divide by two. 
Enter the result on line 1b. 
Line 1c. Add the land’s beginning and ending year values and divide by two. Enter the result on line 1c. 
M3A, line 2 
Capitalized rents are rents paid by you for land, buildings, equipment, etc., during the tax year. 
Multiply the rents you paid for property located or used in Minnesota by eight and enter the result in column A. The rents you receive are 
included in the sales factor. 

Payroll Factor 
M3A, line 4 
In column A, enter your total payroll paid (including guaranteed payments to partners for services) or incurred in Minnesota, or paid for labor 
performed in Minnesota in connection with the trade or business during the tax year. 

Sales Factor 
M3A, line 5 
In column A, enter the amount of sales in Minnesota. In column B, enter total sales. Divide column A by column B and carry the result to five 
decimal places. Enter the result in column C. This is your sales factor. 
The sales factor includes all sales, rents, gross earnings or receipts received in the ordinary course of your business, except: 
  •  Interest 
  •  Dividends 
  •  Sales of capital assets under IRC section 1221 
  •  Sales of property used in the trade or business, except sales of leased property that is regularly sold as well as leased 
  •  Sales of stock or sales of debt instruments under IRC section 1275(a)(1) 

Determining Minnesota Sales
Real Property 
Sales, rents, royalties and other income from real property are attributed to the state in which the property is located. 
Tangible Personal Property 
Sales of tangible personal property are attributed to Minnesota if the property is received by the purchaser within Minnesota and the taxpayer 
is taxed in this state, regardless of the f.o.b. point, other conditions of the sale, or the ultimate destination of the property. 
                                                                                                                                   Continued 9 

Completing Form M3A (Continued) 

Tangible personal property delivered to a common or contract carrier or foreign vessel for delivery to a purchaser in another state or nation is 
a sale in that state or nation, regardless of f.o.b. point or other conditions of the sale. 
Property is received by a purchaser in Minnesota if the recipient is located in this state, even if the property is ordered from outside 
Minnesota. 
Sales of tobacco products, beer, wine and other alcoholic beverages to someone licensed to resell the products only within the state of 
ultimate destination is a sale in the destination state. 
Receipts from leasing or renting tangible personal property, including finance leases and true leases, are attributed to the state in which 
the property is located. Receipts from the lease or rental of moving property are attributed to Minnesota to the extent the moving property is 
used in Minnesota. 
The extent of use is determined as follows: 
  •  A motor vehicle is used wholly in the state in which it is registered. 
  •  Receipts from rolling stock are assigned to Minnesota in the ratio of miles traveled in Minnesota to total miles traveled. 
  •  Receipts from aircraft are assigned to Minnesota in the ratio of landings in Minnesota to total landings. 
  •  Receipts from vessels, mobile equipment and other mobile property are assigned to Minnesota in the ratio of days the property is in  
Minnesota to the total days of the tax year. 
Intangible Property 
Sales of intangible property are attributed to the state in which the property is used by the purchaser. 
Royalties, fees and similar income received for the use of or the privilege of using intangible property (such as patents, copyrights, trade 
names, franchises or similar items) are attributed to the state in which the property is used by the purchaser. 
Intangible property   is attributed   to Minnesota if the purchaser uses the property, or rights in the property, to conduct business within this state, 
regardless of the location of the purchaser’s customers. 
If the property is used in more than one state, then the sales or royalties must be apportioned to Minnesota pro rata based on the portion of use 
within this state. If you cannot determine the portion of use in Minnesota, then exclude the sales or royalties from both the numerator and the 
denominator of the sales factor. 
Personal Services 
Receipts from the performance of personal services are attributed to the state in which the services are received. 
Receipts from services provided to a corporation, partnership or trust may only be attributed to a state in which it has a fixed place of doing 
business. 
If you can’t determine where the service was received, or if it was received in a state where the corporation, partnership or trust doesn’t have 
a fixed place of business, use the location of the office of the customer from which the service was ordered. 
If you can’t determine the ordering office, use the office location to which the service was billed. 

Minimum Fee 
M3A, lines 6-9 
Partnerships are subject to the minimum fee if the sum of its Minnesota source property, payroll and sales or receipts is at least $1,160,000. 
However, you are exempt from the minimum fee if more than 80% of your income is from farming. 
If you are exempt from the minimum fee, enter zero on line 9 of M3A and on line 1 of Form M3. Also, be sure to check the appropriate box 
in the heading at the top of your return to indicate you are a farm partnership. 
M3A, line 7—Adjustments 
The minimum fee is determined by your total Minnesota property, payroll and sales. 
In some cases the property and sales used for computing the minimum fee will be different than the amounts reported on lines 1-6. The 
following adjustments should be made to your Minnesota factors on line 7. 
Add: 
All tangible property owned or rented that is not included on line 3 of M3A. Some examples include construction in progress, idle property, 
any nonbusiness property or rent expense. The amounts should be determined in the same manner as the amounts on lines 1 and 2. 
Subtract: 
  •  Any amounts included on lines 3 and 5 that represent your share of the factors passed through from other partnerships. 
  •  Any sales or receipts from an air carrier business. 
  •  If the tax year is a short tax year, subtract the amount of the average value of tangible property that is excluded because of prorating for a 
short tax year. The amount excluded for a short year is determined by multiplying M3A, column A, line 1 by a fraction: 
     365 - number of days in the tax year 
                   365                                                                                                                              10 
Enclose a schedule showing the computation and pass-through information of any adjustments listed on M3A, line 7. 

Completing Schedule KPI 

Enter the information associated with this partnership and partner. If the partner is a one-member LLC, a grantor or substantial owner of a 
grantor trust, also enter the federal ID or Social Security number of the partner who is ultimately taxed for Minnesota purposes. 

Purpose
Complete and provide Schedule KPI to: 
  •  All nonresident individual, estates, or trust partners 
  •  Any Minnesota individual, estate, or trust partners who have adjustments to income 
  •  All partners if the partnership is electing PTE Tax 
A partnership must provide each partner with enough information regarding adjustments to income in order for the partner to complete a 
Minnesota income tax return and determine their correct Minnesota tax. 
Use Schedule KPI to provide the necessary information to the partner. The schedule shows each partner their specific share of the 
partnership’s income, credits and modifications. Provide the partner a copy of all pages of the completed Schedule KPI and the instructions. 
You do not have to provide Schedule KPI if all the following are true: 
   • There are no modifications or credits 
  •  The individual partner is a full-year Minnesota resident 
  •  The partnership did not elect PTE Tax 
Enclose copies of the Schedules KPI and attachments issued to partners with your Form M3. Also enclose copies of your federal Schedules K 
and K-1. 
If you are required to amend your federal partnership return or you have been audited by the IRS, you must file an amended Minnesota return 
using Form M3X, Amended Partnership Return, and Schedules KPI and KPC, if appropriate. You may also elect to pay the additional tax at 
the partnership level if the amended return is a result of a federal BBA centralized partnership audit and you make the election on Schedule 
M3BBA. See Schedule M3BBA for more details. 

Partner’s Federal Tax ID or Social Security Number
Enter the partner’s Social Security number or Federal ID.  If the partner or member is a disregarded entity or grantor trust, enter the partner’s 
information as reported on Federal Schedule K-1 Item E. 
A $50 penalty will be assessed for each incorrect tax ID number used for a partner after being notified by the department that the number is 
incorrect. 

Line Instructions 
Calculate lines 1–35 the same for all resident and nonresident partners. Calculate lines 36-49 for estate, trust, and nonresident individual 
partners, and resident individual partners if the partnership elected PTE tax. Calculate lines 50-52 for nonresident partners only. 
Partnership Partners: When completing Schedules KPI, be sure to include any amounts reported on the Schedule KPC you received as a 
partner of a partnership (include Schedule KPC with your return). 

All Partners Lines 1-35—            
KPI, line 1 
If you received federally tax-exempt interest dividends from a mutual fund, you may have to enter an amount on line 1. To determine the 
amount, if any, use the following instructions: 
  •  If 95% or more of the federally tax-exempt dividends from a mutual fund came from bonds issued by Minnesota, include only the portion 
   of the federally tax-exempt dividend generated by non-Minnesota bonds. 
  •  If less than 95% of the federally tax-exempt interest dividends from a mutual fund came from bonds issued by Minnesota, include all of the 
   federally tax-exempt interest dividend from that fund. 
Enter the partner’s distributive share of this amount on line 1. 
KPI, line 2 
Determine the state income taxes deducted in arriving at ordinary income or net rental income of the partnership. Do not include the 
minimum fee in this amount. Enter the partner’s distributive share of this amount on line 2. 
KPI, line 3 
Expenses or interest deducted on your federal return that relate to income not taxed by Minnesota must be added back to the partner’s 
Minnesota income. 
Enter the partner’s share of any federal deductions that are attributable to income not taxed by Minnesota, other than U.S. government bond 
interest or other federal obligations. 
If you had expenses attributable to interest or mutual fund dividends from U.S. bonds, see line 14 of Schedule KPI. Do not include these 
expenses on line 3.                                                                          Continued                                            11 

Completing Schedule KPI (Continued) 

KPI, line 4 
If you claimed federal bonus depreciation, your partners must add back 80% of the bonus depreciation to Minnesota. 
Follow the steps below to determine the partner’s share to enter on line 4: 
1.   Add line 14 and line 25 of your federal Form 4562.............................................................. 
2.   Total of any bonus depreciation amounts passed through to you as a partner of a partnership  
  (from line 7 of Schedule KPC).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
   3.  Add steps 1 and 2.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
   4.  Multiply step 3 by the partner’s percentage of ownership interest. ................................................. 
Enter the result from step 4 on line 4 of the partner’s Schedule KPI. 
Federal bonus depreciation subtraction. For five years following the addback year, your partners may be able to subtract one-fifth of the 
addback on their Minnesota income tax return. See the instructions for Form M1, Individual Income Tax, and Form M2, Income Tax Return 
for Estates and Trusts, for details. 
KPI, line 5 
Determine the amount of foreign-derived intangible income (FDII) you deducted from net income under Internal Revenue Code (IRC) 
section 250 for the taxable year. Enter the partner’s distributive share of this amount on line 5. 
KPI, line 6 
This line is intentionally left blank. 
KPI, line 7a 
Enter each resident and nonresident individual partner’s share of the gross profit from any installment sale of S corporation stock or assets, 
partnership interests or assets executed after December 31, 2016. 
If the sale was completed by the partnership completing this schedule, the total gross profit to be allocated among the partners is reported 
on federal Form 6252, line 16. If the sale was executed by an entity owned by this entity, or another entity in a multi-tiered structure, this 
information is reported on: 
   • Schedule KF, line 6a 
   • Schedule KS, line 7a 
   • Schedule KPC, line 10a 
If installment sale information is reported to this entity on informational schedules from other entities, the amount reported to the partners 
should equal the total amount reported to this entity on all Schedules KF, KS, and KPC. 
If the partnership receives installment payments from multiple sales executed after December 31, 2016, attach a schedule to Form M3 
detailing the different sales and distributive allocations. 
KPI, line 7b 
Enter each resident and nonresident individual partner’s share of installment sale income the sale of s corporation stock, partnership interests, 
and any installment sale income from the sale of the assets of any s corporation or partnership. If the sale was completed by the partnership 
completing this schedule, the total installment sale income to be allocated to the partners is reported on Form 6252, line 24. If the sale was 
executed by an entity owned by this entity, or another entity in multi-tiered structure, this information is reported on: 
   • Schedule KF, line 6b 
   • Schedule KS, line 7b 
   • Schedule KPC, line 10b 
If installment sale information is reported to this entity on informational schedules from other entities, the amount reported to the partners 
should equal the total amount reported to this entity on all Schedules KF, KS, and KPC. 
If the partnership receives installment payments from multiple sales executed after December 31, 2016, attach a schedule to Form M3 
detailing the different sales and distributive allocations. 
KPI, lines 8-13 
These lines are intentionally left blank. 
KPI, line 14 
Interest earned on certain direct federal obligations is taxable on the federal return, but is not taxable on the state return. 
Determine the net interest you received from primary obligations issued by the U.S. government, such as savings bonds and treasury notes, 
that are held directly by the partnership. Do not include obligations where the U.S. government is only a guarantor. Be sure to subtract any 
investment interest and other expenses you deducted on the federal return that relate to this income.                           Continued                                                              12 

Completing Schedule KPI (Continued) 

Enter the partner’s distributive share of this amount on line 14. 
KPI, line 15 
Determine the amount of deferred foreign income included in net income under IRC section 965 for the taxable year. Enter the partner’s 
distributive share of this amount on line 15. 
KPI, line 16 
If you are a licensed cannabis business with the Office of Cannabis Management, include any expenses that are disallowed on your federal 
return due to IRC section 280E. Enter the partner’s distributive share of the disallowed section 280E expenses on line 16. 
KPI, Line 17 
Your partner(s) may be able to reduce their taxable income if this partnership: 
  •  Reported a nonconformity adjustment to your partner(s) in tax years 2019 through 2022 for business interest expense deducted under the 
   special rule (CARES Act Section 2306) in section 163(j)(1)(A) and (B) of the Internal Revenue Code. 
  •  Have an unused Minnesota-only excess business interest expense carried forward from your 2019 through 2022 Minnesota returns for 
   partners who elected composite income tax or had PTE satisfy their filing requirement. 
This subtraction reported on line 17 of Schedule KPI may only be used for composite income tax, PTE tax, and nonresident withholding 
purposes. The amount will not flow to the partner’s income tax return. 
To determine the amount of your partner’s subtraction from this partnership, sum the amounts reported on the following nonconformity 
adjustment lines: 
   • 2019 Schedule KPI, line 11 
   • 2020 Schedule KPINC, line 5
   • 2021 Schedule KPINC, line 5
   • 2022 Schedule KPINC, line 5
Multiply the total of the above lines by 20 percent. This is the amount of your partner’s subtraction in tax year 2023 for composite income tax, 
PTE tax, or nonresident withholding purposes. 
KPI, line 18 
Determine the state income tax refund included in ordinary income or net rental income. Enter the partner’s distributive share of this amount 
on line 18. 
KPI, lines 19-20 
These lines are intentionally left blank. 
KPI, Line 21 
If you received a certificate from the Minnesota Housing Finance Agency (MHFA), enter the partner’s distributive share of the credit on line 
21. 
KPI, Line 22 
If you are eligible for the nonrefundable Short Line Railroad Infrastructure Modernization Credit, enter the partner’s distributive share of the 
credit on line 22. 
KPI, Line 23 
If you are eligible for the nonrefundable Credit for Sales of Manufactured Home Parks to Cooperatives, enter the partner’s distributive share 
on line 23. 
KPI, line 24 
Enter the partner’s distributive share of the 2023 credit for increasing research activities. If the business qualifies, the credit cannot be claimed 
by the partnership and the full credit must be passed through to the partners. 
KPI, line 25 
If you received a credit certificate from DEED for eligible production costs, enter the certificate number in the space provided and the 
partner’s share of the credit on line 25. 
KPI, line 26 
If you received a credit certificate from the Minnesota Rural Finance Authority for selling or leasing agricultural assets to a beginning farmer, 
enter the certificate number in the space provided and the partner’s share of the credit on line 26. 
If the partner has multiple credits, enter the certificate number your partnership received directly from the Rural Finance Authority within the 
certificate number box. If the partner has multiple credits and received all credits from other pass-through entities, enter the certificate number 
relating to the largest credit amount within the certificate number box. Subtotal the partner’s share of all credit amounts on line 26. Provide a 
statement to the partner showing credit numbers and the partner’s distributive share of the credit for all amounts included on line 26. 
                                                                                                       Continued                            13 

Completing Schedule KPI (Continued) 

KPI, line 27 
For partnerships who receive a Historic Structure Rehabilitation Credit Certificate from the Minnesota State Historic Preservation Office 
(SHPO): 
   • If the partnership’s initial application for allocation certificate was submitted to SHPO on or before December 31, 2017, use the credit 
   amount shown on the credit certificate. 
   • If the partnership’s initial application for allocation certificate was submitted to SHPO after December 31, 2017, use one-fifth of the credit 
   amount shown on the credit certificate. 
Enter the partner’s distributive share, if any, of the Historic Structure Rehabilitation Credit based on the partner’s share of the partnership’s 
assets, or as specifically allocated in the partnership’s organizational documents, as of the last day of the taxable year. 
You must also include the NPS project number, which is provided on the credit certificate you received from the SHPO of the Minnesota 
Historical Society when the project was completed and placed into service. 
KPI, line 28 
Enter the partner’s share, if any, of the Employer Transit Pass Credit that is passed through to the partners. 
KPI, line 29 
Enter the partner’s share, if any, of the Enterprise Zone Credit that is passed through to the partners. 
KPI, line 30 
If you elected PTE Tax on Schedule PTE, enter the partner’s share of the credit from Part 2 of Schedule PTE. 
If payment of the PTE tax satisfies the partner’s filing requirement, check the box on line 30. 
KPI, line 31 
Enter the partner’s share, if any, of the Minnesota backup withholding. 

KPI, Lines 32-35 
If, for regular tax purposes, you elected the optional 60-month write-off under IRC section 59(e) for all property in this category, skip lines 
32-35. No adjustments are necessary. 
KPI, line 32 
Intangible drilling costs (IDCs) from oil, gas and geothermal wells are a tax preference item to the extent that the excess IDCs exceed 65% of 
the net income from the wells. The tax preference item is computed separately for oil and gas properties and for geothermal properties. 
Enter the partner’s distributive share of the following: IDCs allowed for regular tax purposes under IRC section 263(c), (but not including 
any section 263(c) deduction for nonproductive wells) less the amount that would be allowed had the IDCs been amortized over a 120-month 
period starting with the month the well was placed in production. 
KPI, line 33 
Gross income from oil, gas and geothermal properties are used in determining if the excess IDCs exceed 65% of the net income from the 
wells. 
Enter the partner’s distributive share of the aggregate amount of gross income [within the meaning of IRC section 613(a)] from all oil, gas 
and geothermal properties that was received or accrued during the tax year. 
KPI, line 34 
Deductions allocable to oil, gas and geothermal properties are used in determining if the excess IDCs exceed 65% of the net income from the 
wells. 
Enter the partner’s distributive share of any deductions allocable to oil, gas and geothermal properties. Do not include deductions for 
nonproductive wells. 
KPI, line 35 
In the case of oil wells and other wells of nonintegrated oil companies, enter the partner’s distributive share of the amount by which the 
depletion deduction exceeds the adjusted basis of the property at the end of the tax year. 
In computing the year-end adjusted basis, use the rules of IRC section 1016. However, do not reduce the adjusted basis by the current year’s 
depletion. Figure the excess amount separately for each property. If the depletion deduction for any property does not exceed the adjusted 
basis at year-end, do not include a tax preference amount for that property. 

Minnesota Portion of Amounts From Federal Schedule K-1 (1065) — Lines 36-49 
KPI, line 36 
The Minnesota source gross income is used to determine whether a nonresident partner is required to file a Minnesota income tax return or 
has the option to elect composite income tax.                                                                               Continued             14 

Completing Schedule KPI (Continued) 

Enter the partner’s distributive share of the partnership’s Minnesota source gross income. The Minnesota source gross income is the total of 
the amounts apportioned to Minnesota that are included on lines 3, 6, and 7 (other than losses) of federal Form 1065; lines 18a and 19 and 
20a (other than losses) of federal Form 8825; line 9 of Schedule F (1040); line 3a, 5, 6a, 7, 8, 9a, 10 and 11 of Schedule K (1065, not reported 
elsewhere) plus Minnesota source gross income amounts from all partnerships, estates, and trusts in which the partnership is a partner or 
beneficiary. Partners are provided this information on line 34 of Schedule KPC. 
KPI, lines 37-48 
From the partner’s federal Schedule K-1 (1065), enter the Minnesota portion of amounts on lines 37-48. 
On line 47, include the Minnesota portion of any items from the Schedule K-1 that are not specifically labeled on lines 37-46 and 48. 
Line 48 refers to the Minnesota apportioned amount of federal section 179 expense from the federal Schedule K-1. 
Unless the partnership elects PTE tax, lines 36-52 do not need to be completed for Minnesota individual residents. All income of a Minnesota 
individual resident is taxed by Minnesota, regardless of the source. 
KPI, line 40 
Guaranteed payments to partners (for services and use of capital) make up a portion of the partner’s distributive share of partnership income. 
Accordingly, to determine the Minnesota portion of each partner’s share of guaranteed payments, multiply the amount reported to the partner 
on Schedule K-1, line 4, to Minnesota using the same apportionment percentage or assignment ratio used to allocate the income from which 
the guaranteed payment was deducted federally. 

Nonresident Individual Partners Only 
KPI, line 50 
When determining the partner’s share of the partnership’s Minnesota source distributive income, you must make adjustments for any items 
you passed through to the partner on lines 1 through 31 of the partner’s Schedule KPI. 
Follow the steps below to determine line 50: 
1.   Federal bonus depreciation amount from line 4 of the shareholder’s Schedule KPI ..................................  
  2.  Multiply step 1 by 80% (0.80)............................................................................. 
   3. Enter the amount from line 5 of the partner’s Schedule KPI  ..................................................... 
4.   Add step 2 and step 3  ..................................................................................  
5.   Multiply step 4 by apportionment factor from line 49 of the partner’s Schedule KPI ..................................  
6.   Combine lines 37-47 of the partner’s Schedule KPI ...........................................................  
7.   Add steps 5 and 6  .....................................................................................  
8.   To the extent allowed by law, enter one-fifth of the partner’s share of the federal bonus depreciation that was added  
    back in a year the partner elected to be included in composite income tax .........................................                       
9.   To the extent allowed by law, enter one-ffh of the partner’s share of the section 179 expensing that was added back  
    in a year the partner elected to be included in composite income tax..............................................                        
10.  Enter the amount from lines 15 and 17 .....................................................................  
11.  Add steps 8, 9, and 10 ..................................................................................  
12.   Multiply step 11 by the apportionment factor from line 49 of the partner’s Schedule KPI ..............................  
13.   Enter amount from line 48 of partner’s Schedule KPI ..........................................................  
14.   Add Steps 12 and 13 ...................................................................................  
15.   Subtract step 14 from step 7..............................................................................                              
Enter the result from step 15 on line 50 of the partner’s Schedule KPI. This amount is the partner’s adjusted Minnesota source distributive 
income. 
KPI, line 51 
Composite Income Tax 
Nonresident individual partners must pay tax if their Minnesota gross income is more than the minimum filing requirement for the year 
($13,825 for 2023). 
Nonresident partners who are included in a PTE tax election should not elect composite income tax. 

                                                                                                                            Continued        15 

Completing Schedule KPI (Continued) 

Partners who receive a share of gross profit or income from an installment sale reported on line 7a or 7b of Schedule KPI are not eligible to 
elect the partnership to pay composite income tax on their behalf. 
Skip this line if the nonresident partner did not elect the partnership to pay composite income tax on their behalf or if the partnership elected 
PTE tax. 
  To determine the amount of composite income tax to pay on behalf of each electing partner, follow the steps below: 
  1.  Multiply line 50 of Schedule KPI by 9.85% (0.0985) ........................................................... 
  2.  Add lines 21-23, 25-29, and 31 of Schedule KPI   .............................................................. 
  3.  Subtract step 2 from step 1 ................................................................................ 
The result in step 3 is the amount you are required to pay on behalf of the electing individual partner. Enter this amount on line 51 of the 
partner’s Schedule KPI and check the box to indicate the partner’s election to be included. 
If the individual elects to be included in composite income tax but has zero tax due, enter zero on line 51. Even though the amount may be 
zero, you must check the box to indicate the election. 
Once you have completed all the Schedules KPI for your electing nonresident individual partners, add the amounts on line 51 of all the 
schedules and enter the total on line 3 of Form M3. This is the amount of composite income tax you are required to pay on behalf of your 
electing partners. 
KPI, line 52—Nonresident Withholding 
Nonresident individual partners who are not included in the composite income tax or PTE tax may be subject to withholding. See Nonresident 
Withholding on pages 3 and 4 to determine if your nonresident individual partners are subject to Minnesota withholding. 
  To determine the amount of tax to withhold for each nonresident individual partner, follow the steps below: 
  1.  Multiply line 50 of Schedule KPI by 9.85% (0.0985) ........................................................... 
  2.  Add lines 21-23, 25-29, and 31 of Schedule KPI   ............................................................. 
  3.  Subtract step 2 from step 1 ...............................................................................               
The result in step 3 is the amount you are required to withhold from the nonresident individual partner, unless the individual submits Form 
AWC, Alternative Withholding Certificate. 
If the individual submits Form AWC, withhold the amount from line 6 of the certificate. Check the box provided on line 52 of the partner’s 
Schedule KPI and also on line 4 of Form M3. Be sure to enclose a copy of the certificate when you file your return. 
If the individual submits a false or fraudulent Form AWC, the department may require you to withhold the maximum percentage from that 
individual in the future, even if an exemption certificate is submitted. 
Be sure to inform your partners that they must include their Schedule KPI when they file their Form M1 to claim the Minnesota withholding. 
If the schedule is not included, the department will disallow the withholding and assess the tax or reduce their refund. 

                                                                                                                                              16 

Completing Schedule KPC 

Enter the information associated with this partnership and partner. 

Purpose
Complete and provide Schedule KPC to each corporate and partnership partner. A partnership must provide each partner with enough 
information for them to complete a Minnesota income tax return and determine their correct Minnesota tax. Schedule KPC is used to show 
each corporate and partnership partner their specific share of the partnership’s credits, modifications and apportionment factors. The pro rata 
share of the apportionment factors are used in two different ways (depending on if the relationship between partner and partnership is unitary) 
in computing the corporate or partnership partner’s Minnesota income. 
There may be other items that a corporate partner would need to know in order to complete its Form M4, Corporation Franchise Tax Return. 
If applicable, you should pass that information through to the corporate partners. For more information, see the instructions for Form M4. 
Provide the partner a copy of both the front and the back of the completed Schedule KPC and the instructions. 
Enclose copies of the Schedules KPC and attachments issued to partners with your Form M3. Also enclose copies of federal Schedules K and 
K-1 with your partnership return. 
Enter the partners Federal ID.  If the partner or member is a disregarded entity enter the partner’s information as reported on federal schedule 
K-1 Item E. 
A $50 penalty will be assessed for each incorrect tax ID number used for a partner after being notified by the department that the number is 
incorrect. 

Line Instructions 
Partnership Partners:  When completing Schedules KPC, include any amounts reported on the Schedule KPC you received as a partner of a 
partnership (include Schedule KPC with your return). 
KPC, lines 1 and 2 
Generally, all of the income of a partnership is apportionable. If you have nonapportionable income, the corporate and partnership partners 
need to know their share of the nonapportionable income. Provide the partner with a schedule describing the type of income. 
Enter the partner’s share of Minnesota source nonapportionable income on line 1. Enter the partner’s share of total nonapportionable income 
on line 2. 
KPC, line 3 
Enter the partner’s distributive share of the minimum fee from line 1 of the partnership’s Form M3. 
KPC, line 4 
Enter the partner’s distributive share of the partnership’s interest income exempt from federal tax. Provide the partner with a schedule listing 
how much is from Minnesota municipal bonds. 
KPC, line 5 
Enter the partner’s distributive share of any state income tax (other than the minimum fee) the partnership deducted in arriving at the 
partnership’s net income. 
KPC, line 6 
Skip this line for all partners filing as a C corporation. 
Expenses or interest deducted on your federal return that relate to income not taxed by Minnesota must be added back to the individual 
partners’ Minnesota income. 
Enter the partner’s share of any federal deductions that are attributable to income not taxed by Minnesota, other than U.S. government bond 
interest or other federal obligations. 
If you had expenses attributable to interest or mutual fund dividends from U.S. bonds, see line 17 of Schedule KPC. Do not include these 
expenses on line 6. 
KPC, line 7 
If you claimed federal bonus depreciation, your partners must add back 80% of the bonus depreciation to Minnesota. 
Follow the steps below to determine the partner’s share to enter on line 7: 
1.   Add line 14 and line 25 of your federal Form 4562.............................................................. 
2.   Total of any bonus depreciation amounts passed through to you as a partner of a partnership (from line 7 of Schedule KPC).... 
    3.  Add steps 1 and 2........................................................................................ 

    4.  Multiply step 3 by the partner’s percentage of ownership interest. .................................................                 17 
Enter the result from step 4 on line 7 of the partner’s Schedule KPC.                                                     Continued 

Completing Schedule KPC (Continued) 

Federal bonus depreciation subtraction. For five years following the addback year, your partners may be able to subtract one-fifth of the 
addback on their Minnesota income tax return. See the instructions for Form M3, M4, or M8 for details. 
KPC, line 8 
Determine the amount of foreign-derived intangible income (FDII) you deducted from net income under IRC section 250 for the taxable year. 
Enter the partner’s distributive share of this amount on line 8. 
KPC, line 9 
This line is intentionally left blank. 
KPC, line 10a 
Enter each corporate or partnership partner’s share of the gross profit from any installment sale of  partnership interests or assets executed 
after December 31, 2016. 
If the sale was completed by the partnership completing this schedule, the total gross profit to be allocated among the partners is reported 
on federal Form 6252, line 16. If the sale was executed by an entity owned by this entity, or another entity in a multi-tiered structure, this 
information is reported on Schedule KF, line 6a, or Schedule KPC, line 10a. 
If installment sale information is reported to this entity on informational schedules from other entities, the amount reported to the partners 
should equal the total amount reported to this entity on all Schedules KF, KS, and KPC. 
If the partnership receives installment payments from multiple sales executed after December 31, 2016, attach a schedule to Form M3 
detailing the different sales and distributive allocations. 
KPC, line 10b 
Enter each corporate or partnership partner’s share of installment sale income from the sale of partnership interests or assets executed after 
December 31, 2016. 
If the sale was completed by the partnership completing this schedule, the total installment sale income to be allocated to the partners is 
reported on federal Form 6252, line 24. If the sale was executed by an entity owned by this entity, or another entity in multi-tiered structure, 
this information is reported on Schedule KF line 6b, Schedule KS line 7b, or Schedule KPC line 10b. 
If installment sale information is reported to this entity on informational schedules from other entities, the amount reported to the partners 
should equal the total amount reported to this entity on all Schedules KF, KS, and KPC. 
If the partnership receives installment payments from multiple sales executed after December 31, 2016, attach a schedule to Form M3 
detailing the different sales and distributive allocations. 
KPC, lines 11-16 
These lines are intentionally left blank. 
KPC, line 17 
Skip this line for all partners filing as a C corporation. 
Interest earned on certain direct federal obligations is taxable on the federal return, but is not taxable on the state return. 
Determine the net interest you received from primary obligations issued by the U.S. government, such as savings bonds and treasury notes, 
that are held directly by the partnership. Do not include obligations where the U.S. government is only a guarantor. Subtract any investment 
interest and other expenses you deducted on the federal return that relate to this income. 
Enter the partnership partner’s distributive share of this amount on line 17. 
KPC, line 18 
Determine the amount of deferred foreign income included in net income under IRC section 965 for the taxable year. Enter the partner’s 
distributive share of this amount on line 18. 
KPC, line 19 
If you are a licensed cannabis business with the Office of Cannabis Management, include any expenses that are disallowed on your federal 
return due to IRC section 280E. Enter the partner’s distributive share of the disallowed section 280E expenses on line 19. 
KPC, line 20 
Determine the state income tax refund included in ordinary income or net rental income. Enter the partner’s distributive share of this amount 
on line 20. 
KPC, lines 21 and 22 
These lines are intentionally left blank. 

                                                                                                                                Continued      18 

Completing Schedule KPC (Continued) 

KPC, line 23 
If you received a certificate from the Minnesota Housing Finance Agency (MHFA), enter the partner’s distributive share of the credit on line 
23. 
KPC, line 24 
If you are eligible for the nonrefundable Short Line Railroad Infrastructure Modernization Credit, enter the partner’s distributive share of the 
credit on line 24. 
KPC, line 25 
If you are eligible for the nonrefundable Credit for Sales of Manufactured Home Parks to Cooperatives, enter the partner’s distributive share 
on line 25. 
KPC, line 26 
Enter the partner’s distributive share of the 2023 credit for increasing research activities. If the business qualifies, the credit cannot be claimed 
by the partnership and the full credit must be passed through to the partners. 
KPC, line 27 
If you received a credit certificate from DEED for eligible film production costs, enter the certificate number in the space provided and the 
partner’s share of the credit on line 27. 
KPC, line 28 
Enter the partner’s distributive share of the Tax Credit for Owners of Agricultural Assets being passed through to partners. For more 
information on the credit amount allowed please see page 13 of the instruction, KPI, line 26. 
If the partner has multiple credits, enter the certificate number your partnership received directly from the Rural Finance Authority within the 
certificate number box. If the partner has multiple credits and received all credits from other pass-through entities, enter the certificate number 
relating to the largest credit amount within the certificate number box. Subtotal the partner’s share of all credit amounts on line 28. Provide a 
statement to the partner showing credit numbers and the partner’s distributive share of the credit for all amounts included on line 28. 
KPC, line 29 
For partnerships who receive a Historic Structure Rehabilitation Credit Certificate from the Minnesota State Historic Preservation Office 
(SHPO): 
   • If the partnership’s initial application for allocation certificate was submitted to SHPO on or before December 31, 2017, use the credit 
   amount shown on the credit certificate. 
   • If the partnership’s initial application for allocation certificate was submitted to SHPO after December 31, 2017, use one-fifth of the credit 
   amount shown on the credit certificate. 
Enter the partner’s distributive share, if any, of the Historic Structure Rehabilitation Credit based on the partner’s share of the partnership’s 
assets, or as specifically allocated in the partnership’s organizational documents, as of the last day of the taxable year. 
You must also include the NPS project number, which is provided on the credit certificate you received from the SHPO of the Minnesota 
Historical Society when the project was completed and placed into service. 
KPC, line 30 
Enter the partner’s distributive share of the Employer Transit Pass Credit being passed through to partners. 
KPC, line 32 
Enter the partner’s distributive share of Minnesota Backup Withholding. 
KPC, lines 33 
Enter the partner’s distributive share of Minnesota Source Gross Income. See the instructions for line 36 of Schedule KPI on page 13. 
KPC, lines 34 and 35 
Enter the partner’s distributive share of the partnership’s apportionment factors determined on M3A. 

     Use a mailing label if filing a paper return 
     Use this mailing label on your own envelope to mail Form M3 and copies of 
     your federal return and schedules. (Cut and tape to your envelope.) 

                          Partnership Tax 
                          Mail Station 1760 
                          600 N. Robert Street 
                          St. Paul, MN 55146-1760                                                                                                 19