MN State Filing of Backup Withholding Passthrough from Estate

toshepode Member Newcomer

I need to file a state return involving backup withholding credit passed through from the estate of a decedent. On the federal side this is no problem and usually is reported via a K-1 as the source document. On the MN side, my understanding is that it will be reported via a MN Schedule KF as the source document, probably on line 40. If you look at form KF this should be entered on MN Schedule M1W line 7. The FreeTaxUSA site says M1W is supported for MN, however I so of no way to enter the value from MN Schedule KF line 40 on M1W. Also FreeTaxUSA does not mention Schedule KF support on the website.

So what is the story here. I asked support via chat, and after some work they said not supported. Wanted to ask here to see if this is true and if there are any recommended work arounds. It seems odd this would not be supported because withholding from K-1 type reporting is fairly common and you do support federal K-1 reporting and federal withholding. It also seems like some of the competitors may supported it such as OLT, TaxAct, and TurboTax though frankly it is hard to know as some of the others seem not to as well and I have seen contradictory things.

Also a related question. If I complete the taxes on FreeTaxUSA, file Federal electronically, but at the last step for state just download to file by paper, should I have any issues just switching in the one or two pages I need to change to add the backup withholding. Just wondering if there are things I need to think about while mixing and matching FreeTaxUSA paper filing documents with my own hand done ones.

Thanks. Appreciate any insights or cautions.

Best Answer

  • RyanZ
    RyanZ FreeTaxUSA Agent
    Answer ✓

    Hello toshepode, and welcome to the FreeTaxUSA Community!

    Specifically, the lines on the Minnesota form M1W that FreeTaxUSA does NOT support are lines 3 & 7, specifically the ones related to pass-through withholdings. Even though it is common for withholding made at the entity level to be reported on the federal return, it isn't common on the state K-1.

    At this time, we don't support the pass-through withholdings from entity state forms K-1 for most states, including Minnesota.

    We don't support making changes to your tax returns or tax forms after submitting them for e-filing or finalizing for mailing.


  • toshepode
    toshepode Member Newcomer

    Just some more background. Looks like MN M1W is a 2 page document. MN KF Line 40, enters into MN M1W line 7 which is on the bottom of page 2. That total then rolls up to MN M1W Ln 3 on the bottom of page 1. Page 1 of M1W is supported by FreeTaxUSA and I have data on it in my return and the total of page 1 is on Ln 4. That rolls up to MN M1 Ln 20 which is on page 2 of M1. So I guess maybe FreeTaxUSA only supports page 1 of M1W?