How to Pay Minnesota Taxes: Online, Payment Plans, and More
When tax season comes, your top priority is likely getting squared away with the IRS. But don’t forget your tax obligations in Minnesota. Paying on time and in full helps you avoid penalties, interest, and more aggressive collection efforts by the Minnesota Department of Revenue.
We understand that navigating tax payments can be confusing, especially when you’re coordinating payments between both state and federal agencies. Keep reading to learn more about how to pay your taxes, your payment options if you can’t pay in full, and what happens if you ignore your Minnesota tax obligations. For more information, contact BestTaxPro™ online or call 763-477-4205.
Key Takeaways
- You can pay MN taxes online via e-Services, through your bank, or by mail.
- Payment plans are available for both business and individual taxpayers, although application methods vary.
- Minnesota charges interest and penalties for late payments.
- The tax professionals at BestTaxPro™ can help you explore tax relief options if you can’t afford to pay your taxes all at once.
How to Pay Minnesota Taxes Online
Many people prefer to pay their MN taxes online for automatic payment confirmation and not having to worry about the postal system getting their payment to its final destination. There are several ways you can pay online via the Department of Revenue.
Bank Account
You can pay from your bank account as long as your account is based in the United States. The payment method is considered to have been received immediately, but may not pull from your bank account for three to seven days.
Both individuals and businesses can pay via the e-Services payment system. Most business accounts are required to pay online and may pay additional penalties if they pay using other methods. To pay, you simply log in to your tax account on the e-Services payment system, select which type of tax debt you want to pay, and enter your payment details.
You can also initiate a payment from your bank account by requesting a bill payment through your bank. Payment is then withdrawn by ACH. While most banks offer a bill pay service, not all do—and some charge a fee. You have to set up this type of payment through your bank.
If you want to write your payment, you can authorize a transfer from your bank account to the Department of Revenue. For additional information on this option, you must call the DOR at 651-556-3003 or 1-800-657-3909.
Debit or Credit Card
Finally, you can pay by credit or debit card. Payments are processed by US Bank, and the fee is 1.25% of the payment amount for debit cards and 2.15% for credit cards.
Other Ways to Pay Your MN State Taxes
If you can’t pay online or prefer not to, there are other options available to you.
Check or Money Order
Those who want to pay their taxes via check or money order can do so by mailing their payment with a payment voucher to the DOR. You have to go to the Online Services section of the DOR website and create a payment voucher by entering your taxpayer ID number, mailing address, and payment amount.
The DOR then generates a payment voucher that you must then print out and mail with your tax payment to the address on the voucher. You can also pay by check or money order in person, but you must still have a payment voucher to accompany your payment.
Cash
Taxpayers who want to pay in cash can only do so at the Minnesota Department of Revenue in St. Paul.
Keep in mind that these payment options aren’t as fast as paying online, as your payment won’t be credited to your account until it’s received by the DOR. This could result in the accrual of penalties or interest while your payment travels to the MN DOR and gets processed. Additionally, if the postal system loses your payment, you’re ultimately responsible for its failure to arrive.
What to Do If You Can’t Pay in Full
While the DOR prefers that taxpayers pay in full and on time, they recognize that there are circumstances that make this impossible. If you can’t pay in full, you can request a payment agreement either online or by calling 651-556-3003 or 1-800-657-3909.
When you apply online as an individual, you log on to the Payment Plan Agreement System. You must already have a tax bill to apply online—if you have not yet received a bill, you’ll need to contact the DOR by phone, email, or letter.
Depending on how much you owe, the DOR may require a personal financial statement that outlines your income, expenses, and assets. Be prepared to provide supporting documentation, such as bills, statements, and invoices.
Business taxpayers must request payment plans by phone, email, or letter. However, if your business is subject to cannabis tax or has an active liquor license, you can’t enter into a payment agreement.
Consequences of Not Paying
Failing to pay on time or at all can have drastic financial consequences for individual and business taxpayers.
Individual Taxpayer Penalties
Failing to pay on time results in a 4% penalty of the amount not paid by April 15. There’s an additional 5% penalty for the amount not paid within 180 days. On top of the late payment penalties, you’ll need to pay interest on the amount due. For 2024 through 2025, the interest rate is 8%.
Business Taxpayer Penalties
Penalties depend on which type of payment is late. If you’re late on sales withholding tax, for example, the penalty is 5% of the amount not paid by the due date. There’s an additional 5% penalty for each month that the tax is not paid in full, capped at 15%.
If you pay petroleum tax and you’re late, you pay 1% per day of any unpaid tax or fee—this is capped at 10%.
Occupation, UBIT, fiduciary, partnership, S-corp, and corporate taxes incur an initial 6% penalty for any unpaid tax.
Other Consequences
Penalties and interest are just the beginning. If your MN tax debt continues to go unpaid, the DOR will take more aggressive collection actions against you. They can place a tax lien on your property, levy your bank accounts, garnish your wages, and seize your assets. The DOR can also offset the state tax refunds you receive in the future and apply them to your tax debt. Note that even if you have an accepted payment plan, the DOR can still apply your tax refunds to your tax debt.
If you don’t pay your business taxes or if you default on your business payment agreement, the DOR may revoke your business permit.
The longer you wait to address your tax debt, the fewer options you have. Also, the more likely it is that the DOR will take drastic action against you. This is why it’s important to take action early.
Benefits of Working With BestTaxPro™
Working with an MN tax professional can save you substantial time, money, and stress when you’ve fallen behind on tax payments or filings. Depending on your circumstances, you may qualify for hardship status that delays payments, a payment agreement that allows you to pay over time, a compromise agreement that settles your debt, or penalty abatement.
BestTaxPro™ is headquartered in Minnesota, so we know how to navigate DOR issues and late state taxes, whether you’re in Minneapolis, Maple Grove, or another part of the state. Our experience also extends to IRS back tax issues, so if you’re facing federal tax concerns, you can rely on us to provide the guidance you need. Ready to schedule your consultation? Let’s talk. Call us at 763-477-4205 or contact us online to get started.
FAQ's
Paying online, as you get immediate confirmation of payment without having to wait for your payment to work its way through the mail system.
Both individual and business taxpayers may qualify for MN DOR payment plans. You can apply online, over the phone, in person, or by mail as an individual taxpayer. Businesses must apply over the phone, in person, or by mail.
They will escalate their collection efforts, eventually resulting in liens, levies, wage garnishments, and intercepting tax refunds.
This tax compromise option is available for select taxpayers, but the requirements are strict and the rejection rate is high.
BestTaxPro™ can assist with both MN state and federal tax debts.
