MinnesotaCare Provider Tax

February 21, 2023 by Holly Connolly
Outsourced Accounting and Advisory Services

MinnesotaCare Provider Tax is a tax on patient services in Minnesota. Revenue generated is used by the state of Minnesota to pay for the MinnesotaCare program, which provides state-subsidized health care coverage for low-income individuals. The tax is based on gross receipts, not profits and the rate is adjusted by the Commissioner of Management and Budget per MN Statutes.  The tax rate is 1.6% in 2023 and 1.8% in 2022. The state of Minnesota requires quarterly estimated tax payments of 90% of ¼ of your actual tax for the current year or ¼ of actual tax for the previous year, whichever is smaller.  Estimated tax payments are due the on 15th of April, July, October, and January each year.  In addition to making quarterly payments, the annual tax return must be filed by March 15th for the previous year, with a 60 day extension to file available, if needed.  Therefore, the 2022 Minnesota Care Provider Tax return is due March 15, 2023, or May 15, 2023, if an extension is filed.

The MinnesotaCare Provider Tax calculation starts with gross receipts, and then there is a long list of exemptions that can reduce the amount of gross receipts subject to the tax. Exemptions include, among others, amounts received from Medicare, certain other government agencies, and payments received from other health care providers, hospitals, and surgical centers.  The exemption list is long and each situation is unique. You can find additional information on the MinnesotaCare Tax website to help get you started

If you are new to the MinnesotaCare Provider Tax or want a review of your methodology and calculations, contact our team today. The state of Minnesota performs regular audits of tax returns submitted and charges penalties and interest for misreporting, which depending on the amount underreported, could be substantial.