Minnesota tax rebate checks start arriving this week

Nearly 1 million Minnesotans can expect to see tax rebates in their bank accounts this week, a boost Democratic lawmakers said families need as kids head back to school.

Direct deposits landed in roughly 200,000 bank accounts Tuesday evening, and the Department of Revenue estimated up to 700,000 more Minnesotans had money sent directly to their accounts Wednesday. More than 2 million payments totaling $1.1 billion will be sent out through September.

"It was part of a cohesive tax policy and a cohesive and holistic approach to the legislation to make life more affordable for middle-class Minnesotans," Gov. Tim Walz said Wednesday, announcing the arrival of the rebates alongside legislators and families who are eligible for the checks.

Individuals with a gross adjusted income of up to $75,000 in 2021 are eligible for $260, while married filers with an income of up to $150,000 could get double that amount. Minnesotans are disqualified if they made any amount over that threshold. Families can get an additional rebate check for up to three dependents, for a maximum of $1,300.

Republicans threw cold water on Walz's announcement, noting that the checks are smaller than the $2,000 rebates for couples and more for families he pitched earlier this year.

"Democrats took full control and decided they'd rather spend the record $17.5 billion surplus themselves than return it back to Minnesotans," House Minority Leader Lisa Demuth, R-Cold Spring said in a statement. "Now, only a select few Minnesotans will be getting a paltry $260 — hardly what they were promised by the governor."

The DFL-controlled Legislature passed the one-time rebate checks this spring as part of a broader $3 billion tax package that also cut Social Security taxes and created a new child care tax credit for low-income families, while raising $1 billion in taxes on some corporations and wealthier Minnesotans.

Senate leader Mark Johnson, R-East Grand Forks, said other tax increases and new fees for cars, license tabs and deliveries will cost Minnesotans more than they get from the rebates. "The discussion of today's small refund simply pales in comparison to the higher tax burden Minnesotans will face in the years to come," he said.

But Ebonie McMillan, a mother of three from Brooklyn Center, said the rebates are coming "at the best time possible" as she's starting to buy supplies and new uniforms for school.

"It's a good boost to start the school year out, and they get to go to school happy and content like everyone else," she said.

Minnesotans don't need to apply for the rebates, which the department determined based on income tax filings for calendar year 2021. Residents had to live in Minnesota for part or all of 2021 to be eligible and could get a reduced credit if they lived in the state part of the year. If a spouse has died since 2021, their partner will receive both rebates.

Recipients who have up-to-date banking information with the state should receive their rebate automatically in their bank account. If the state doesn't have banking information, officials will send a paper check to the address listed on their 2021 tax return.

Roughly 5,100 of the 200,000 rebates sent for deposit Tuesday kicked back, said revenue Commissioner Paul Marquart, meaning the resident's bank account information has changed. The department will send those out as paper checks to the address on their 2021 tax form.

Paper checks will take longer to receive than direct deposits, he said. If Minnesotans believe they're eligible but haven't received a deposit or a paper check by mid-September, Marquart encouraged them to contact the Department of Revenue.

"It's going to ease the pain of inflation, help continue to address the burdens created by the COVID-19 pandemic and really meet the everyday needs of folks around the state," Marquart said.

The checks are not subject to state taxes but Marquart said it's not yet clear if they will be federally taxable.

It's been two decades since state government sent out a similar round of rebates over several years pitched by former Gov. Jesse Ventura. Minnesotans and eventually Ventura referred to them as "Jesse checks."

Walz, who had originally dubbed the rebates "Walz checks" in 2022, didn't refer to them that way Wednesday. He said there won't be any signatures or letters from his office to accompany the checks.