2.5 percent of the basis of all qualified property. Qualified business income is defined as the net amount of income, gain, deductions, and loss. A qualified business is a trade or business (not being an employee) that is not a specified service business to include professional practices (e.g., doctors, dentists, accountants), consulting activities, athletes and athletic performances, brokers and financial services, investments and investment managers. In 2025 the threshold amounts for the Section 199A qualified business income deduction is $191,950 for individual filers and $383,900 for joint filers. Refer to IRS information: - Qualified Business Income Deduction - Qualified Business Income Deduction FAQs Limitation on Deductibility of Business Interest. The 2017 Tax Cuts and Jobs Act also added new language limiting the deductibility of interest paid by the business to 30 percent of the business’s adjusted taxable income. This would include, for example, interest paid to a commercial lender on a business loan. For S corporations and partnerships the limitation is applied at the partner or shareholder level. But taxpayers that have annual gross receipts of $25 million or less during the preceding three years are exempt from this provision. Refer to IRS information:
- Credits and deductions for businesses - Guide to business expense resources
Minnesota Corporate (Franchise) Tax Rates. The Minnesota corporate income tax rate is 9.8 percent. Corporations are subject to an alternative minimum tax based on Minnesota alternative minimum taxable income at the 5.8 percent. The amount due is the excess of the alternative minimum tax liability over business’ regular franchise liability. Minnesota Minimum Fee Rates. A graduated minimum fee is imposed on Minnesota entities filing as corporations, S corporations, and partnerships. The fee is indexed annually for inflation. The 2024 brackets are: Minnesota property, payroll, and sales Fee Less than $1,220,000 $0 $1,220,000 to $2,439,999 $250 $2,440,000 to $12,199,999 $730 $12,200,000 to $24,389,999 $2,440 $24,390,000 to $48,779,999 $4,890 $48,780,000 or more $12,200
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