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    3                                         FINAL DRAFT 10/2/23                                                                                                 3
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    6                                                                                                                  *237071*                                   6
    7  2023 Schedule RAIL, Short Line Railroad                                                                                                                    7
    8                                                                                                                                                             8
    9  Infrastructure Modernization Credit                                                                                                                        9
    10 For taxpayers classified as a Class II or Class III Railroad                                                                                               10
    11                                                                                                                                                            11
    12                                                                                                                                                            12
    14 Name of Taxpayer                                           FEIN or Social Security Numer             123456789Minnesota Tax ID                             14
    13 NAME HEREXXXXXXXXXXXXXXXXXXXX                              0123456789                                                                                      13
    15                                                                                                                                                            15
    16                                                                                                                                                            16
    17 Part 1 — Qualifications                                                                                                                                    17
    18 Check the box if the answer is “yes.”                                                                                                                      18
    19                                                                                                                                                            19
    20   1  Are you classified by the U.S. Surface Transportation Board as a Class II or Class III railroad? ... ..... ....... ..... ...... ..... ...    1 X      20
    21                                                                                                                                                            21
    22   2  Did you own or lease railroad infrastructure in Minnesota as of January 1, 2021? .... ....... ..... ..... ...... ...... ..... .....    2       X      22
    23                                                                                                                                                            23
    24   3  Did you own or lease railroad infrastructure in Minnesota as of the close of the tax year? .. ..... ...... ..... ...... ..... ...... .    3    X      24
    25                                                                                                                                                            25
    26   4  Did you pay qualified railroad reconstruction or replacement expenditures to maintain, reconstruct,                                                   26
    27     or replace railroad infrastructure during the tax year?  .... ...... ...... ...... ..... ...... ..... ..... ...... ...... ...... ....    4      X      27
    28                                                                                                                                                            28
    29 Continue to Part 2 if you checked all questions in Part 1.                                                                                                 29
    30                                                                                                                                                            30
    31 Part 2 — Credit Calculation                                                                                                                                31
    32   1  Qualified railroad reconstruction and replacement expenses .. ....... ..... ...... ..... ...... ..... ...... ...          1    123456789              32
    33                                                                                                                                                            33
    34   2  Multiply line 1 by 50% ..... ...... ..... ...... ..... ....... ..... ...... ...... ..... ..... ....... ..... ....         2    123456789              34
    35                                                                                                                                                            35
    36   3  Enter the number of miles of railroad track owned or leased in Minnesota as of the close of the taxable year,                                         36
    37     for which expenses are included on line 1 ... ...... ..... ....... ..... ...... ..... ..... ...... ...... ...... .         3    123456789              37
    38                                                                                                                                                            38
    39   4  Multiply line 3 by $3,000 ... ...... ..... ....... ..... ...... ..... ..... ...... ...... ...... ..... ...... ....        4    123456789              39
    40                                                                                                                                                            40
    41   5  Enter the lesser of line 2 or line 4. This is the amount of your credit. ... ...... ..... ....... ..... ...... ..... ..   5    123456789              41
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                                                                          9995
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    65                                                                                                                                                            65

                                                FINAL DRAFT 10/2/23

2023 Schedule RAIL Instructions

What is Schedule Rail?
Complete Schedule Rail to claim the short line railroad infrastructure modernization credit (credit) railroad. To be eligible, you must be 
classified by the United States Surface Transportation Board as a Class II or Class III railroad, and have made qualified railroad reconstruction 
or replacement expenditures during the tax year.
The credit can be claimed against income, corporate franchise, or unrelated business income taxes. The credit is nonrefundable and may be 
transferred or carried forward for five succeeding taxable years. 
Schedule RAIL must be filed with one of the following forms:
• Form M1, Individual Income Tax Return
• Form M2, Income Tax Return for Estates and Trusts
• Form M3, Partnership Return
• Form M4, Corporate Franchise Tax Return
• Form M8, S Corporation Return
• Form M4NP, Unrelated Business Income Tax (UBIT) Return 

How is the credit calculated?
The credit is equal to 50% of qualified expenses up to $3,000 per mile of track qualifying for the credit.  Track that qualifies for the credit is 
track that:
•  Is located in Minnesota. 
•  You owned or leased as of January 1, 2021 and as of the close of the current tax year. 
•  You made qualified railroad reconstruction or replacement expenditures during the current tax year. 

What is a qualified railroad reconstruction or replacement expenditure?
Qualified railroad reconstruction or replacement expenditures are expenditures for maintenance, reconstruction, or replacement of railroad 
infrastructure in Minnesota that you owned or leased as of January 1, 2021.  Expenses relating to new construction of industrial leads, switches, 
spurs and sidings, and extension of existing sidings also qualify.  

What is railroad infrastructure?
Railroad infrastructure includes track, roadbed, bridges, industrial leads and sidings, and track related-related structures. 

Is the credit transferable?
The amount of credit that exceeds the tax liability can be transferred to one other taxpayer. Partnerships, S corporations, and fiduciaries that 
distribute the credit to partners, shareholders, and beneficiaries are not considered to have transferred the credit.

How do I transfer the credit?
You must first claim the credit on your return for the year you paid or incurred the qualifying expenditures. The amount of credit that exceeds 
your tax liability becomes the transferrable portion of the credit.  
Within thirty days of reaching a written agreement with another taxpayer to transfer the credit, the transferee and transferor must file the 
assignment form on page 3 The department will issue a credit certificate to the transferee within 30 days of the submitted assignment form. 
Issuance of the credit certificate does not approve eligibility of the credit or validate any component of the credit calculation. In the case of an 
audit or assessment of the credit, the transferee is responsible for repayments of credits claimed in excess of the allowed amount. 

Line Instructions
If you enter a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), you do not need to enter a Minnesota Tax 
ID number.
Part 1
Check all boxes that are applicable to you and your sales transaction. You must have checked all questions in Part 1 to qualify for the short line 
railroad infrastructure modernization credit. Refer to the instructions above for additional details regarding qualifications. 
Part 2
Line 1 – Qualified railroad reconstruction and replacement expenses 
Enter your gross expenditures in the tax year for maintenance, reconstruction, or replacement of railroad infrastructure you owned or leased as 
of January 1, 2023, and as of the close of your 2023 tax year. 
Rail road infrastructure includes track, railbed, bridges, industrial leads and siding, and track-related structures. 
Line 5 – Credit Amount
The result of line 5 is your short line railroad infrastructure modernization credit. Include the credit on the appropriate following line:

                                                                                                                               Continued           1

                                             FINAL DRAFT 10/2/23

Optional Short Line Railroad Infrastructure Modernization Credit  

Assignment Form

                                , the assignor assigns the unused portion of its Short Line Railroad Infrastructure Modernization Credit in 
the amount shown below for expenditures incurred during the 202  tax year, to                             , the assignee.

Amount being assigned:   $

The assignee and assignor acknowledge and agree that:
1. In the case of an audit or assessment, the assignee is liable for repayment of credits claimed in excess of the amount allowed or allowable.
2. Upon receipt of this form, the Department of Revenue will review the credit claimed to confirm the assigned portion does not exceed the amount 
 available to be assigned. This review does not constitute certification that the credit claimed is not in excess of the amount allowed or allowable. 

                                             Assignor                                  Assignee
Name:                                                                 
SSN, ITIN, or Minnesota ID:                                           
Title:                                                                
Telephone Number:                                                     
Signature:                                                            
Date:                                                                 

Notice: This form must be mailed to the appropriate address at the Minnesota Department of Revenue address below within 30 days of the  
agreement between the assignor and assignee. 

Individuals                                  Corporations, Partnerships S Corporations Insurance
Minnesota Department of Revenue              Minnesota Department of Revenue           Minnesota Department of Revenue
Individual Income Tax                        Corporate Franchise Tax                   Insurance Taxes
c/o Supervisor, Early Audit 2                c/o Corporate Technical Advisor           c/o Insurance Taxes
Mail Station 4122                            Mail Station 5140                         Mail Station 1780 
600 N. Robert St.                            600 N. Robert St.                         600 N. Robert St.
St. Paul, MN 55146-4122                      St. Paul, MN 55146-5140                   St. Paul, MN 55146-1780

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