Tax rebates to be taxed by feds

The federal government is taking a cut from most of the Minnesota tax rebates sent out this fall, meaning a $26 to $286 handover depending on the size of a household’s initial payout.

The Minnesota Department of Revenue failed to convince the IRS to treat the rebate as it had the tax-free pandemic-era checks delivered by other states.

The rebates were $260 per person subject to income caps, with a qualifying household eligible for up to $1,300 if a couple had three or more dependents. It all means that $100 million or more of the $1 billion overall rebate pot will go to the federal government.