2023 S Corporation Form M8 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              through May 1, 2023.The 2023 Minnesota income tax forms incorporate federal law through 
 Due Date   . . .  . . . . . .  . . . . . .  . . . . .  2      this IRC date.
 Payment Options    . . .  . . . . . .  . . . .  2
 Filing Reminders   . . .  . . . . . .  . . .  3-4             Delayed Business Interest Deduction Subtraction
M8 Instructions   . . .  . . . . . .  . . . . . .  5-8         The new delayed business interest deduction allows a subtraction for 1/5th of the amount of the 
M8A Instructions   .  .  .  .  .  .  .  .  .  .  .  .  .  9-11 nonconformity adjustment additions required as a result of the CARES Act Section 2306. For 
Financial Institutions   . .  . . . . . . .  . . . 11          more details, see page 14.
KS Instructions   . . . .  . . . . . .  . . . .  12-17         Housing Tax Credit
Mailing Label . . .  . . . . . .  . . . . . .  . . . . 17      The new Housing Tax Credit is a nonrefundable credit for qualifying contributions to a state 
                                                               fund. To be eligible for the credit, you must apply to the Minnesota Housing Finance Agency 
Questions?
You can find forms and infor-                                  (MHFA) and receive a credit certificate. For more details, visit the MHFA website at www.
                                                               mnhousing.gov.
mation, including answers to 
frequently asked questions and                                 Short Line Railroad Infrastructure Modernization Credit
options for filing and paying                                  The new Short Line Railroad Infrastructure Modernization Tax Credit is a nonrefundable credit 
electronically, on our website at:                             for railroad reconstruction or replacement expenditures of a Class II or Class III railroad. For 
www.revenue.state.mn.us                                        more details, see Schedule RAIL.
Send us an email at:                                           Credit for Sales of Manufactured Home Parks to Cooperatives
businessincome .tax@state .mn .us                              The new Credit for Sales of Manufactured Home Parks to Cooperatives is a nonrefundable 
Call us at 651-556-3075                                        credit for 5% of the amount of the sale. For more details, see Schedule MHP.

Need Forms?                                                    Global Intangible Low-Taxed Income (GILTI)
Go to www.revenue.state.mn.us.                                 Minnesota generally conforms to the federal treatment of GILTI (but not the federal section 250 
                                                               deduction) and repeals the related Minnesota income tax subtraction modifications. GILTI is 
This information is available in                               treated as dividend income for the purposes of the corporate dividends received deduction and 
alternate formats.                                             the sales factor.

Before You File                                                Pass-Through Entity (PTE) Tax 
Complete Your Federal Return                                   The PTE tax was changed in the following ways:
Before you complete Form M8, 
complete federal Form 1120S and                                •  Expands eligibility by allowing partial elections if not all owners are qualifying owners. 
supporting schedules. You will need to                         •  Requires 100% allocation to Minnesota for resident partners.
reference them.                                                •  Removes the requirement that one qualifying owner must be subject to the limitation on state 
                                                               and local taxes (SALT Cap).
Minnesota Tax ID Number                                        •  Clarifies eligibility for a single member limited liability company (LLC) if the LLC is taxed 
Your Minnesota tax ID is the seven-                            as a partnership or S corporation.
digit number you’re assigned when you                          •  Requires partnerships with federal audit adjustments to file an amended Schedule PTE.
register with the department. Generally, 
                                                               For more details, see Schedule PTE and Schedule PTE-RP.
this is the same as your sales and use tax 
or Minnesota employer’s withholding                            Nonresident Withholding and PTE Tax Refunds
tax number. It’s important to include                          Overpayments of nonresident withholding tax and PTE tax are limited to the amount of the 
your Minnesota tax ID on your return                           overpayment that was not deducted or withheld from the shares of the partners or shareholders.
so that any payments you make are 
properly credited to your account.                             Filing Requirements
If you don’t have a Minnesota tax                              Corporations doing business in Minnesota that have elected to be taxed as S corporations under 
ID, apply for one online at www.                               IRC section 1362 must file Form M8.
revenue.state.mn.us and type Business 
Registration in the search box or call                         Who Must File
651‑282‑5225 or 1‑800‑657‑3605.                                The entire share of an entity’s income is taxed to the shareholder, whether or not it is actually 
                                                               distributed. Each shareholder must include their share of income on their tax return. However, 
                                                               the S corporation taxes and minimum fee are paid by the entity.
                                                               A C corporation is required to file Form M4, Minnesota Corporation Franchise Tax, instead of 
                                                               Form M8.                                                                                      1
                                                                                                                                           Continued

General Information (continued)

Minimum Fee
An S corporation 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. 
S corporations that file as QSSS federally include all factors under one parent company and are subject to only one minimum fee at the parent 
company level.
The minimum fee is computed on M8A, which is on page 3 of Form M8.

File Electronically
Options are available to electronically prepare and file your S corporation 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 falls on a weekend or legal holiday, returns and payments electronically made or postmarked on the next business day are 
considered timely.
Extension of Time to File
All S corporations are granted an automatic six‑month extension to file Form M8, 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. (See Extension Payment 
below.)

Payments
There are four types of tax payments an S corporation can make — extension, estimated tax, tax return and amended return payments. You can 
pay electronically, by credit or debit 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 instructions for lines 21 and 22 on page 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 paying by check, go to www.revenue.state.mn.us to create a voucher to print and submit with your check.

Estimated Tax Payments
An S corporation must make quarterly estimated tax payments if the sum of its estimated S corporation taxes, minimum fee, nonresident 
withholding, pass-through entity tax, and composite income tax for all nonresident shareholders electing to participate in composite income tax, 
less any credits, is $500 or more. A S corporation 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 
  electronically, 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 
depending on the number of months in the short tax year. No installments are required for a tax year of fewer than four months.
If estimated tax is required for the S corporation taxes, minimum fee, pass-through entity tax, composite income tax, and/or nonresident 
withholding, include all in the same quarterly payments. 
To make an estimated payment, see Payment Options on page 2. If you’re paying by check, visit our website to complete and print a payment 
voucher to send along with your check. 

Tax Return Payment
If line 24 of Form M8 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, 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
An S corporation may elect to file and pay income tax, on behalf of its shareholders, 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 M8 and see the line 3 instructions 
on page 5.

Composite Income Tax
An S corporation, not making a PTE election, may pay composite Minnesota income tax on behalf of its eligible nonresident shareholders 
who elect to be included in lieu of each shareholder filing their own Minnesota return. The electing individuals must not have any Minnesota 
source income other than the income from this S corporation and other entities for which they are electing composite filing or are a part of a 
PTE tax return.
Shareholders who receive a share of gross profit or income from an installment sale reported on line 7a or 7b of Schedule KS are not eligible 
to elect the S Corporation to pay composite income tax on their behalf.
If you are paying composite income tax for your electing shareholders, check the box for composite income tax on the front of Form M8 and 
see the line 4 instructions on pages 5 and 6.
Nonresidents included in the composite income tax are not subject to the nonresident withholding requirements (see the next section).

Nonresident Withholding
S corporations are required to withhold Minnesota income tax for a nonresident shareholder if:
•  The shareholder has a legal residence that is not Minnesota
•  The shareholder is not included in composite income tax                                                            Continued                 3

General Information (continued)

•  The S corporation is not electing to file and pay PTE tax
•  The shareholder has Minnesota distributive income of $1,000 or more from this S corporation
•  The shareholder has income that was not generated by a transaction related to the termination or liquidation of the S corporation in which 
no cash or property was distributed in the current or prior taxable year
If the S corporation elected PTE tax, the S corporation is not required to withhold for a nonresident shareholder. The nonresident shareholder 
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.
If you are required to pay nonresident withholding, see the line 5 instructions on page 6.
Note: Nonresident individual shareholders 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.
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 
receives for performances in Minnesota. 
An S corporation is an entertainment entity if it is paid compensation for entertainment provided by entertainers who are shareholders. 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 reported. 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 M8.

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 shareholders are required under state law so the department can determine the shareholder’s 
correct Minnesota taxable income and verify if the shareholder has filed a return and paid the tax. The Social Security numbers of the 
shareholders are required under M.S. 289A.12, subd. 13.

Assembling Paper Returns
Arrange your Minnesota schedules in the order they were completed and place them behind your Form M8. Schedules KS should be grouped 
together and sorted with the largest share of Minnesota source income first. Then place your federal return and its schedules behind the 
Minnesota material. Do not staple or tape any enclosures to your return.

Where to File Paper Returns
Mail your Form M8 and all completed Minnesota and federal forms and schedules using a mailing label (below). 
If you do not use the label, mail your forms to: 
Minnesota S Corporation Income Tax  
Mail Station 1770 
600 N. Robert Street  
St. Paul, MN 55146‑1770

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 M8X, Amended S Corporate Return, within 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 fail to report changes as required, a 10% penalty will be assessed on any additional tax.

                                                                                                                                              4

Completing Form M8

Before you file Form M8, you must complete the following:
•  Federal Form 1120S and supporting schedules.
•  Schedule KS for each nonresident shareholder, any Minnesota resident shareholder who has adjustments to income, and all shareholders if 
  the S corporation elected PTE tax (see page 12).
Check Boxes
Initial Return. If this is the S corporation’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 shareholders, check the box for composite income tax on 
the front of your return and see the instructions for line 4.
Financial Institutions. If you are a financial institution electing to be taxed as an S corporation for federal purposes, check the box on the 
front of the form.
Qualified Subchapter S Subsidiary (QSSS). If you are including a qualified subchapter S subsidiary (QSSS) on this return, check the box on 
the front of your Form M8. 
Final Return. If the S corporation is out of business and/or is not required to file Form M8 in future years, check the “Out of Business” box on 
the front of the Form M8.
If you checked the “S election termination” box on your federal Form 1120S, you must attach a copy of your federal return to your Form M8.
Installment Sale of Pass-through Assets or Interests. You are required to check the “Installment Sale of Pass‑through Assets or Interests” 
box if the entity did any of the following:
1) executed an installment sale, after December 31, 2016, of S corporation stock or partnership interests being reported on federal Form 6252
2) executed an installment sale, after December 31, 2016, of S corporation assets and is reporting the sale on federal Form 6252
3) owns an interest in an S corporation, partnership, or trust reporting installment sale gains on line 7 of Schedule KPI or KS, 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 KS to 
report installment sale information to your shareholders.
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 S corporation is electing to pay PTE tax at the entity level on behalf of their 
shareholders. Include Schedule PTE with Form M8.
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.
Corporate Partners: When completing Form M8 and Schedule KS, 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).
Line 1—S Corporation Taxes
Enter the total of the following S corporation taxes on line 1, and check the applicable boxes to indicate the tax types included. Show the 
detail for each type of tax and the percentage apportioned to Minnesota. For each tax, enclose a separate schedule showing your computation.
• Passive income: Determine the Minnesota portion of passive income subject to federal tax. Multiply that amount by 9.8% (0.098). Enclose 
  a copy of the federal schedule used to figure your federal tax.
• Federal Schedule D Taxes: Determine the Minnesota portion of recognized built-in gain and net capital gain subject to federal tax. Multiply 
  that amount by 9.8% (0.098).
• LIFO Recapture: If the S corporation is paying the LIFO recapture tax (figured for the last year the corporation was a C corporation) over a 
  four-year period, include this year’s installment.
Line 2—Minimum Fee
Complete M8A of Form M8 to determine the minimum fee to enter on line 2. See the M8A instructions beginning on page 9.
Line 3 - Pass-Through Entity Tax
Complete Schedule PTE to elect and determine the amount of tax to enter on line 3. Include Schedule PTE with your return filing.
Line 4—Composite Income Tax
To determine line 4, you must first figure the amount of composite tax attributed to each electing shareholder. See the instructions for line 49 
of Schedule KS on page 16.
Add the composite income tax attributed to all electing shareholders (the total of lines 49 from all Schedules KS), and enter the result on line 
                                                                                                                                               5
4 of Form M8.                                                                                                            Continued

Completing Form M8 (continued)

Line 5—Nonresident Withholding
To determine line 5, you must first figure the amount to withhold for each nonresident shareholder. See the instructions for line 50 of 
Schedule KS on pages 16 and 17.
Add the withholding required for all nonresident shareholders (the total of lines 50 from all Schedules KS), and enter the result on line 5 of 
Form M8.
If you received a signed and dated Form AWC, Alternative Withholding Certificate, from one or more shareholders, check the box provided 
on line 5 of Form M8. You must include the certificate(s) when you file your return.
Line 7—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. 
Enter the amount of the credit that is being claimed directly by the S corporation and not passed through to shareholders. 
Line 8—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 8 and the certificate number in the space provided. 
Enter the amount of the credit that is being claimed directly by the S corporation and not passed through to shareholders. 
If you have multiple credits, enter the certificate number your corporation 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 8. Include a statement showing the certificate number and 
corresponding credit amounts for all credits you included on line 8. 
For more details regarding this tax credit, go to the DEED website at mn.gov/deed.
Line 9—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 9.
If you have multiple credits, enter the certificate number your corporation 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 9. Include a statement showing the 
certificate numbers and corresponding credit amounts for all credits you included on line 9.
Line 10—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 10 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.
Line 11—Short Line Railroad Infrastructure Modernization Credit
You may be eligible for the nonrefundable Short Line Railroad Infrastructure Modernization Credit if the S corporation 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 11.
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.
Line 12—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 S corporation 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 12. 
You may carry any unused credit forward for up to 5 years.
Line 15—Minnesota Nongame Wildlife Fund
You can help preserve Minnesota’s rare and endangered animals and plants by donating to this fund. Your donation will be added to your 
total tax and will decrease your refund or increase your balance due. Monies donated are deductible the following year.
For more information, go to the Minnesota Department of Natural Resources website at www.dnr.state.mn.us.

                                                                                                                            Continued            6

Completing Form M8 (continued)

Line 17—Enterprise Zone Credit
If your business has been certified and approved by the Minnesota Department of Employment and Economic Development (DEED) as 
employment property in an enterprise zone, enter the credit that is being claimed directly by the S corporation and not passed through to the 
shareholders. Attach the certification document received from the DEED.  
For details about the zones, go to the DEED website at mn.gov/deed.
Line 18—Estimated Tax and Extension Payments
Enter your total prepayments, including:
•  Your total 2023 estimated tax payments made in 2023 and 2024 paid either electronically or with a payment voucher
•  Any 2023 extension payment, paid electronically or with a payment voucher, that was made by the regular due date when filing under an 
 extension
•  The portion of your 2022 refund applied to your 2023 estimated tax
Line 21—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 21. 
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 20.
Late Filing. If you file 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 20.
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 20.
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. 
Line 22—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
Line 23—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 6
•  Less any credits on lines 7 through 12, and 17
Complete Schedule EST, Additional Charge for Underpayment of Estimated Tax, to determine the additional charge for underpaying 
estimated tax. 
Enter the total charge, if any, on line 23. Enclose the schedule with your return.
Line 24—Amount Due
Add lines 20 through 23. This is the amount of tax you owe. Be sure to check the appropriate box on line 24 to indicate your method of 
payment. See Payment Options on page 2.
Line 25—Overpayment
If line 19 is more than the sum of lines 16 and 21 through 23, subtract the sum of lines 16 and  21 through 23 from line 19.
If you have an overpayment, 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.
Line 26—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 25 
                                                                                                                                                   7
you want to apply toward your 2024 estimated tax.

Completing Form M8 (continued)

Line 27—Refund
If you want to request your refund to be direct deposited into your bank account, complete line 27. Your bank statement will indicate when 
your refund was deposited to your account. Otherwise, skip line 27 and your refund will be sent to you in the mail. 
Line 28—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.
The routing number must have nine digits.                                                       You can find your bank’s routing number and  
                                                                                                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 28, 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.

Signature
The return must be signed by a principal officer of the corporation. 
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 S corporation, 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 M8A

Complete M8A 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 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 single‑sales factor formula does not properly and fairly reflect your Minnesota 
income, and that the alternative formula you have chosen does.
Qualified Subchapter S-Subsidiary
The S corporation parent must now calculate and report one minimum fee for all QSSSs. The S corporation parent must also include all 
assets, liabilities, income, deductions, credits, and apportionment factors including property, payroll, and sales factors, from all QSSSs and 
federally disregarded QSSS under one M8 return.

Property Factor
Enclose the completed federal Schedule L (Form 1120S) or a copy of the S corporation’s balance sheet with your return.
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. 
M8A, lines 1–3
In column A, lines 1a-1c, enter the total property items for your entire business in Minnesota.  
Line 1a. Add the beginning and 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.
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
M8A, line 4
In Column A, enter your total payroll paid or incurred in Minnesota, for the tax year in connection with the business.  

Sales Factor
M8A, 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)
Financial Institutions: (See Apportionment for Financial Institutions on page 11.)
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.

                                                                                                                                Continued      9

Completing Form M8A (continued)

Tangible Personal Property
Sales of tangible personal property are attributed to Minnesota if the property is received by a purchaser within Minnesota and the S 
corporation is taxed in this state, regardless of the f.o.b. point or other conditions of sale, or the ultimate destination of the property.
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 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 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
M8A, lines 6-9
S corporations are subject to a minimum fee if the sum of its Minnesota source property, payroll and sales or receipts is at least $1,160,000.
M8A, 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 6 of M8A. 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 1–5.
Subtract: 
•  Any amounts included on lines 3, 4 or 5 that represent your share of the factors passed through from 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 M8A, column A, line 1 by the fraction: 
                                                                                                                            Continued         10

Completing Form M8A (continued)

   365 - number of days in the tax year
                 365
Enclose a schedule showing the computation and pass‑through information of any adjustments listed on M8A, line 7.

Apportionment for Financial Institutions
Financial institution means any of the following: 
1)  Any corporation or other business entity registered in one of these ways:
   •  under state law as a bank holding company
   •  under the federal Bank Holding Company Act of 1956, as amended
   •  as a savings and loan holding company under the federal National Housing Act, as amended
2)  Any regulated financial corporation; or a national bank organized and existing as a national bank association pursuant to the provisions of U.S.C., title 
   12, chapter 2.
3)  A savings association or federal savings bank as defined in United States Code, title 12, section 1813(b)(1).
4)  Any bank or thrift institution incorporated or organized under the laws of any state.
5)  Any corporation organized under United States Code, title 12, sections 611 to 631.
6)  Any agency or branch of a foreign depository as defined under United States Code, title 12, section 3101.
7)  Any corporation or other business entity that is more than 50% owned, directly or indirectly, by any person or business entity described in clauses (1) 
   to (6), other than an insurance company taxable under chapter 2971.
8)  A corporation or other business entity that derives more than 50% of its total gross income for financial accounting purposes from finance leases. For 
   the purposes of this clause, “gross income” means the average from the current tax year and immediately preceding two years and excludes gross 
   income from incidental or occasional transactions. For purposes of this clause, “finance lease” means any lease transaction that is the functional 
   equivalent of an extension of credit and that transfers substantially all the benefits and risks incident to the ownership of property, including any direct 
   financing lease or leverage lease that meets the criteria of Financial Accounting Standards Board Statement No. 13, accounting for leases, or any other 
   lease that is accounted for as financing by a lessor under generally accepted accounting principles.
9)  Any other person or business entity, other than an insurance company that derives more than 50% of its gross income from activities that an entity 
   described in clauses (2) to (6) or (8) is authorized to transact. For the purposes of this clause, gross income does not include income from nonrecurring, 
   extraordinary items.
Financial institutions complete M8A the same way as other S corporations, except for lines 1d and 5. 
M8A, Line 5—Sales or Receipts Factor
Financial institutions use a receipts factor instead of a sales factor. 
Include the gross income from activities in the ordinary course of business, including income from securities and money market instruments. 
The following are considered Minnesota income: 
•  interest income from loans secured by real or tangible personal property located in Minnesota
•  interest on consumer loans not secured by real or tangible personal property if the borrower is a Minnesota resident 
•  interest on commercial loans not secured by real or tangible personal property if the proceeds are applied in Minnesota
•  merchant discount income if the merchant is located in Minnesota
•  receipts from travelers checks if purchased in Minnesota
•  receipts from credit cards if regularly billed in Minnesota
•  receipts for regulated financial institutions from securities, based on the ratio of total deposits from Minnesota to total deposits in and outside  
   Minnesota
•  receipts for nonregulated financial institutions from securities, based on the ratio of gross business income from Minnesota to total gross business 
   income
•  receipts from secondary market assets treated in the same way as securities
•  receipts from the performance of services if the services are received in Minnesota 

                                                                                                                                                                11

Completing Schedule KS

Purpose
Complete and provide Schedule KS to:
•  All nonresident individual, estate, or trust shareholders
•  Any Minnesota individual, estate, or trust shareholders who have adjustments to income
•  All shareholders if the S corporation is electing PTE Tax
An S corporation must provide each shareholder with enough information for them to complete a Minnesota income tax return and determine 
their correct Minnesota tax. 
Schedule KS is used to provide shareholders with the information they need to file a Minnesota income tax return. The schedule shows each 
shareholder their specific share of the S corporation’s income, credits and modifications. Provide the shareholder a copy of both pages of the 
completed Schedule KS and the instructions. 
You do not have to provide Schedule KS if all the following are true:
•  There are no modifications or credits
•  The individual shareholder is a full-year Minnesota resident
•  The S corporation did not elect PTE Tax
You must enclose with your Form M8 copies of the Schedules KS and attachments issued to your shareholders and copies of your federal 
Schedules K and K‑1.
If you are required to amend your federal S corporation return or you have been audited by the IRS, you must file Form M8X and Schedules KS, 
if appropriate. (See Reporting Federal Changes on page 4.)

Line Instructions
Enter the name, address and identifying number of the shareholder. A $50 penalty will be assessed for each incorrect tax ID number used for a 
shareholder after being notified by the department that the number is incorrect.
Calculate lines 1–35 the same for all resident and nonresident shareholders. Calculate lines 36‑47 for estate, trust, and nonresident individual 
shareholders, and resident individual shareholders if the S corporation elected PTE tax. Calculate lines 48‑50 for nonresident shareholders only.
Corporate Partners: When completing Schedules KS, be sure to include the pro rata shares of any amounts reported on the Schedule KPC you 
received as a partner of a partnership (include Schedule KPC with your return).

All Shareholders 
Lines 1–35
KS, 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 shareholder’s pro rata share of this amount on line 1.
KS, line 2
Determine the state income tax deducted in arriving at ordinary income or net rental income of the S corporation.
Do not include the minimum fee, the built-in gains tax, capital gains tax, LIFO recapture tax or excess net passive income tax in this amount.
Enter the shareholder’s pro rata share of this amount on line 2.
KS, line 3
Expenses or interest deducted on your federal return that relate to income not taxed by Minnesota must be added back to the shareholder’s 
Minnesota income. 
Enter the shareholder’s pro rata 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 KS. Do not include these expenses 
on line 3.
Enclose an explanation or statement showing your computation.
KS, line 4
If you claimed federal bonus depreciation, your shareholders must add back 80% of the bonus depreciation to Minnesota.
                                                                                                                      Continued           12

Completing Schedule KS (continued)

  Follow the steps below to determine the shareholder’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 the S corporation as a partner of a partnership  
  (from line 7 of Schedule KPC).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  3.  Add steps 1 and 2 .......................................................................................
  4.  Multiply step 3 by the shareholder’s percentage of stock ownership. ...............................................
Enter the result from step 4 on line 4 of the shareholder’s Schedule KS.

Federal bonus depreciation subtraction. For five years following the addback year, your shareholders may be able to subtract one‑fifth of 
the addback on their Minnesota income tax return. See the instructions for Form M1 or Form M2 for details.
KS, line 5
Determine the amount of foreign-derived intangible income (FDII) you deducted from net income under the Internal Revenue Code (IRC) 
section 250 for the taxable year. Enter the shareholder’s pro rata share of this amount on line 5.
KS, line 6
This line is intentionally left blank.
KS, line 7a
Enter shareholder’s share of the gross profit from any installment sale of S corporation stock or assets, or partnership interests or assets 
executed after December 31, 2016. 
If the sale was completed by the entity completing this schedule, the total gross profit to be allocated amongst shareholders 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 trust receives installment payments from multiple sales executed after December 31, 2016, attach a schedule to Form M8 detailing the 
different sales and distributive allocations. 
KS, line 7b
Enter shareholder’s share of installment sale income from 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.
KS, lines 8 - 13
These lines are intentionally left blank.
KS, 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 S corporation. 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. 
Enter the shareholder’s pro rata share of this amount on line 14.
KS, line 15
Determine the amount of deferred foreign income included in net income under IRC section 965 for the taxable year. Enter the shareholder’s 
pro rata share of this amount on line 15.

                                                                                                                               Continued                                                 13

Completing Schedule KS (continued)

KS, 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 shareholder’s pro rata share of the disallowed section 280E expenses on line 16.
KS, Line 17
Your shareholder(s) may be able to reduce their taxable income if this S corporation:
•  Reported a nonconformity adjustment to your shareholder(s) in tax years 2019 through 2022 for business interest expense deducted under 
the special rule (CARES Act Section 2306) in section 163(j)(10)(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 
shareholders who elected composite income tax or had PTE satisfy their filing requirement.
This subtraction reported on line 17 of Schedule KS may only be used for composite income tax, PTE tax, and nonresident withholding 
purposes. The amount will not flow to the shareholder’s income tax return. 
To determine the amount of your shareholder’s subtraction from this S corporation, sum the amounts reported on the following 
nonconformity adjustment lines:
•  2019 Schedule KS, line 11
•  2020 Schedule KSNC, line 5
•  2021 Schedule KSNC, line 5
•  2022 Schedule KSNC, line 5
Multiply the total of the above lines by 20 percent. This is the amount of your shareholder’s subtraction in tax year 2023 for composite 
income tax, PTE tax, or nonresident withholding purposes. 
KS, line 18
Determine the state income tax refund included in ordinary income or net rental income. Enter the shareholder’s pro rata share of this amount 
on line 18. 
KS, lines 19 and 20
These lines are intentionally left blank.
KS, Line 21 
If you received a certificate from the Minnesota Housing Finance Agency (MHFA), enter the shareholder’s pro rata share of the credit on line 
21. 
KS, Line 22
If you are eligible for the nonrefundable Short Line Railroad Infrastructure Modernization Credit, enter the shareholder’s pro rata share of the 
credit on line 22. 
KS, Line 23
If you are eligible for the nonrefundable Credit for Sales of Manufactured Home Parks to Cooperatives, enter the shareholder’s pro rata share 
on line 23. 
KS, line 24
Enter the shareholder’s pro rata share of the 2023 credit for increasing research activities that is passed through to the shareholders. 
If the business qualifies, the credit cannot be claimed by the S corporation and the full credit must be passed through to the shareholders. 
KS, line 25
If you received a credit certificate from DEED for eligible production costs, enter the certificate number in the space provided and the 
shareholder’s share of the credit on line 25.
KS, line 26
Enter the shareholder’s pro rata share of the Tax Credit for Owners of Agricultural Assets that is passed through to the shareholders.
If the shareholder has multiple credits, enter the certificate number your S corporation received directly from the Rural Finance Authority 
within the certificate number box. If the shareholder 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 shareholder’s share of all credit 
amounts on Line 26. Provide a statement to the shareholder showing credit numbers and the shareholder’s distributive share of the credit for 
all amounts included on line 26.
KS, line 27
For S corporations who receive a Historic Structure Rehabilitation Credit Certificate from the Minnesota State Historic Preservation Office 
(SHPO):
•  If the S corporation’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.                                                                                                        14
                                                                                                                           Continued

Completing Schedule KS (continued)

•  If the S corporation’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 shareholder’s share of the Historic Structure Rehabilitation Credit based on the shareholder’s share of the S corporation’s assets, or 
as specifically allocated in the S corporation’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.
KS, line 28
Enter the shareholder’s pro rata share of the Employer Transit Pass Credit that is passed through to the shareholders.
KS, line 29
Enter the shareholder’s pro rata share of the Enterprise Zone Credit that is passed through to the shareholders.
KS, line 30
If you elected PTE Tax on Schedule PTE, enter the shareholder’s share of the credit from Part 2 of Schedule PTE. 
If payment of the PTE tax satisfies the shareholder’s filing requirement, check the box on line 30.
KS, line 31
Enter the shareholder’s pro rata share of Minnesota backup withholding.

KS 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.
KS, 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 shareholder’s pro rata share of the following: IDCs allowed for regular tax purposes under IRC section 263(c), (but not including 
any IRC 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. 
KS, 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 shareholder’s pro rata 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.
KS, 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 shareholder’s pro rata share of any deductions allocable to oil, gas and geothermal properties. Do not include any deductions for 
nonproductive wells.
KS, line 35
In the case of oil wells and other wells of nonintegrated oil companies, enter the shareholder’s pro rata 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 (1120S) — Lines 36-47
KS, line 36
The Minnesota source gross income is used to determine whether a nonresident shareholder is required to file a Minnesota income tax return 
or has the option to elect composite income tax.
Enter the shareholder’s pro rata share of the S corporation’s Minnesota source gross income.  Minnesota source gross income is the total 
amounts apportioned to Minnesota included on lines 3, 4, and 5 (other than losses) of federal Form 1120S; lines 18a, 19, and 20 (other than 
losses) of federal Form 8825; line 9 of Schedule F (1040); lines 3a, 4, 5a, 6, 7, 8a, 9, and 10 of Schedule K (1120S) plus Minnesota source 
gross income amounts from all partnerships, estates, and trusts in which the S corporation is a partner or beneficiary. S corporation partners 
are provided this information on line 34 of Schedule KPC.
                                                                                                                      Continued                 15

Completing Schedule KS (continued)

KS, lines 37–46
From the shareholder’s federal Schedule K‑1 (1120S), enter the Minnesota portion of the amounts on lines 37 through 46. 
On line 45, include the Minnesota portion of any items from the Schedule K‑1 that are not specifically labeled on lines 37‑44 and 46.
Line 46 refers to the Minnesota apportioned amount of federal section 179 expense from the federal Schedule K‑1.

Nonresident Individual Shareholders Only
KS, line 48
When determining the shareholder’s pro rata share of the S corporation’s Minnesota source distributive income, you must make adjustments 
for any items you passed through to the shareholder on lines 1 through 31 of the shareholder’s Schedule KS.
Follow the steps below to determine line 48:
  1.  Federal bonus depreciation amount from line 4 of the shareholder’s Schedule KS ...................................                                                                           
  2.  Multiply step 1 by 80% (0.80) ............................................................................                                                                                   
  3.  Enter the amount from line 5 of the shareholder’s Schedule KS ..................................................
  4.  Add step 2 and step 3  ..................................................................................
  5.  Multiply step 4 by apportionment factor from line 47 of Schedule KS.............................................
  6.  Combine lines 37‑45 of the shareholder’s Schedule KS ........................................................
  7.  Add steps 5 and 6  .....................................................................................                                                                                     
  8.  To the extent allowed by law, enter one‑fifth of the shareholder share of the section 179 expensing that was added  
back in a year the shareholder elected to be included in composite tax or nonresident withholding was required  ...........                                                                        
  9.  To the extent allowed by law, enter one‑fifth of the federal bonus depreciation that was added back in a year the  
shareholder elected to be included in composite income tax or nonresident withholding was required  ...................
  10.  Combine lines 15 and 17 of the shareholder’s Schedule KS  ....................................................                                                                              
  11.  Add steps 8, 9, and 10 ..................................................................................                                                                                   
  12.  Multiply step 11 by the apportionment factor from line 47 of the shareholder’s Schedule KS  ..........................
  13.  Enter amount from line 46 of shareholder’s Schedule KS.......................................................                                                                               
  14.  Add Steps 12 and 13  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
  15.  Subtract step 14 from step 7..............................................................................                                                                                  
Enter the result from step 15 on line 48 of the shareholder’s Schedule KS. This amount is the shareholder’s adjusted Minnesota source 
distributive income. 
KS, line 49—Composite Income Tax
Nonresident shareholders must pay tax if their Minnesota source gross income is more than the minimum filing requirement for the year 
($13,825 for 2023).
Nonresident shareholders who are included in a PTE tax election should not elect composite income tax.
Shareholders who receive a share of gross profit or income from an installment sale reported on line 7a or 7b of Schedule KS are not eligible 
to elect the S Corporation to pay composite income tax on their behalf.
Skip this line if the nonresident shareholder did not elect the S corporation to pay composite income tax on their behalf or if the S corporation 
elected PTE tax.
To determine the amount of composite income tax to pay on behalf of each electing shareholder, follow the steps below:
  1.  Multiply line 48 of Schedule KS by 9.85% (0.0985) ............................................................
  2.  Add lines lines 21‑23, 25‑29, and 31 of Scheule KS ............................................................
  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 shareholder. Enter this amount on line 49 of the 
shareholder’s Schedule KS and check the box to indicate the shareholder’s election to be included.
If the shareholder elects to be included in composite income tax but has zero tax due, enter zero on line 49. Even though the amount may be 
zero, check the box to indicate the election.
                                                                                                                          Continued                                                               16

     Completing Schedule KS (continued)

     Once you have completed all the Schedules KS for your electing nonresident shareholders, add the amounts on line 49 of all the schedules 
     and enter the total on line 4 of Form M8. This is the amount of composite income tax you are required to pay on behalf of your electing 
     shareholders.
     KS, line 50—Nonresident Withholding
     Nonresident individual shareholders who are not included in the composite income tax or PTE tax may be subject to withholding. See 
     Nonresident Withholding on pages 3-4 to determine if your nonresident individual shareholders are subject to Minnesota withholding.
       To determine the amount of tax to withhold for each nonresident individual shareholder, follow the steps below:
       1.  Multiply line 48 of Schedule KS by 9.85% (.0985) .............................................................
       2.  Add lines lines 21‑23, 25‑29, and 31 of Schedule KS                                              ...........................................................
       3.  Subtract step 2 from step 1 ................................................................................
     The resultFOR ADDITIONALin step 3 is theINFORMATIONamount you are required to withhold from the nonresidentALIGNindividual shareholder, unless the individual submits 
                   PLEASE CONTACT THE US POSTAL SERVICE
     FormREPRESENTATIVEAWC,Alternative WithholdingBELOW:              Certificate       .                                                 WITH
                                                                                                                                          UPPER
PatrickIfVogtthe individual submits Form AWC, withhold the amount from line 6 of the certificate. CheckRIGHTthe box provided on line 50 of the 
     shareholder’sMail ClassificationSchedule KSSpecialistand also on line 5 of Form M8. Be sure to enclose a copy of theCORNERcertificate when you file your return.
Business Mail Entry
100 S 1st ST Rm 115If the individual submits a false or fraudulent Form AWC, the department may require you to withhold the maximum percentage from that 
     individualMinneapolisin the future,MNTO55401-9651BEevenUSEDif an exemptionONLY WITHcertificateFIM - Ais(Courtesysubmitted.Reply Mail)
612-349-4747                       AND ZIP CODE:
Fax: 612-349-3576Shareholders must include their Schedule55145-1770KS when they fileDP=99their FormCK=7M1 to claim the Minnesota withholding. If the schedule is not 
     included,Email:thePatrick.D.Vogt@usps.govdepartment will disallow the withholding and assess the tax or reduce their refund.

                                                            CAUTION:
                                   USE ONLY FOR ADDRESS BEARING THE ZIP+4 CODE
                                   ABOVE.  SEE PUBLICATION 25 FOR PRINTING
                                   REQUIREMENTS.
                   Use a mailing label if filing a paper return
                   Use this mailing label on your own envelope to mail Form M8 and  
                   attachments. (Cut and tape to your envelope.)                                                                          ALIGN
                                                                                                                                          WITH
                                                                                                                                          LOWER
                                                                                                                                          RIGHT
                                                                                                                                          CORNER
                                                            S Corporation Tax
                                                            Mail Station 1770
                                                            600 N. Robert Street
                   THIS POSITIVE PREPARED FOR:              St. Paul, MN 55146-1770          COURTESY REPLY

                                                            MINNESOTA REVENUE
                                                            S CORPORATION TAX
                                                            MAIL STATION 1770
                                                            SAINT PAUL MN  55145-1770
                   (c) 1989-2010 Envelope Manager version 3.021.005.  Created September 15, 2010    10:08 AM
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                   **********************************************************************************

                   SIZE:  FIM & BARCODE ARE ACTUAL SIZE:  DO NOT ENLARGE OR REDUCE!

                   PLACEMENT:  Special care also must be taken to ensure FIMs and
                   **********************************************************************************                                                                      17
                   barcodes are placed properly on the mail piece.  Improper size or
                   placement ensures the mail piece will not meet USPS regulations and
                   defeat their purpose of automation compatibility.