Star Tribune
IRS says it won’t reverse decision to tax Minnesota rebate checks
The federal government says it won’t budge on its decision to impose taxes on nearly $1 billion in rebate checks sent to Minnesotans last fall.
The IRS said in December that the agency considers the checks federally taxable income, a surprise to state officials that sparked a flurry of lobbying to try to reverse that decision before income tax filing season starts.
But in letters sent to Minnesota U.S. Reps. Pete Stauber and Angie Craig, IRS Commissioner Daniel Werfel said the state’s rebates didn’t fall under the category of general welfare or disaster relief, both of which can be excluded from federal taxes.
“I wish to assure you that it is the IRS’s priority to ensure that the rules concerning income inclusion and exclusion are applied fairly and consistently to every state payment we consider, and are clear for taxpayers,” Werfel wrote. “The IRS is eager and willing to work with state officials to clarify these complex questions as state actions and legislation are being considered.”
The rebate checks were part of a $3 billion package of tax cuts and increases passed by the DFL-led government last session. Individual Minnesotans were eligible for a $260 rebate check if they had a gross adjusted income of up to $75,000 in 2021, and $520 for married filers who earned up to $150,000. Families could get an additional rebate check for up to three dependents, for a maximum of $1,300.
The IRS said in the letter that the income thresholds were above the limit of “what we generally consider to be covered by the general welfare exclusion.” Democrats hoped the federal government would treat the rebates like other relief funds passed during the pandemic, but Werfel said the “legislative record does not provide the kind of clarity we need to conclude that the legislative purpose of the one-time payments was to provide relief from the COVID-19 pandemic.”
Stauber, who contacted the IRS in December to try to reverse the decision, blamed “careless legislative mistakes” made by Gov. Tim Walz’s administration and the DFL Legislature for the surprise taxes.
“The fact remains that the state surplus was a result of out-of-control COVID-relief spending by Democrats in Washington,” he said in a statement. “This taxpayer money was sent to state capitals around the country, and now it is being taxed. This is insulting to the hardworking people of Minnesota.”
Walz also lobbied the federal government to reverse the decision, saying Minnesota was being treated unfairly in its determination that the checks weren’t the same as pandemic-era relief passed in other states.
“Minnesota is being treated unfairly on this. They picked an arbitrary date to end the emergency,” Walz said in December. The federal government ended the COVID health emergency May 11. Legislation authorizing the rebate checks was signed May 24.
The federal tax on the checks could cost between $26 and $286, depending on a household’s income and how much was received in rebates, according to an analysis from the Department of Revenue. The state has sent a form to all rebate recipients to use when filing their federal individual income tax returns this year.
Star Tribune
Long Prairie, MN school board dismisses its superintendent, the latest controversy in this small town
LONG PRAIRIE, MINN. — The school district superintendent dressed up as the school mascot, Thor, on football nights. He read the graduation address in both English and Spanish. He even set up office hours in the cafeteria, granting easier approachability to students.
But now, two months into the school year, Daniel Ludvigson is gone. Or, rather, “on special assignment,” according to the terminology of the Long Prairie-Grey Eagle School Board, which voted 4-3 earlier this month to remove him as superintendent. The move came weeks after voting to not renew his contract, which expires at the end of the school year in June.
Four board members — two of whom voted to oust Ludvigson, including Board Chair Kelly Lemke — are up for re-election next week.
The dismissal is the latest blow in this central Minnesota community on the edge of the prairie. Over the last nine months, the town of 3,400 residents and seat of Todd County has lost its mayor, a city manager, two school board members, and now its superintendent.
Students walked out earlier this month in support of Ludvigson. Signs in support of Ludvigson can be seen across town on the lawns of apparent Democrats and Republicans alike. And last week, hundreds packed the American Legion off Hwy. 71 to eat beef sandwiches and sign support letters for Ludvigson, who only swung by to pick up his child for hockey practice.
In a time of great divide in America, this fight has nothing to do with politics.
“You’ve got Harris buttons and Trump hats side-by-side, arm-in-arm,” said Amanda Hinson, a former local newspaper reporter who is concerned the board is not being upfront about why they placed Ludvigson on special assignment. “We want transparency in our government.”
Lawn signs around Long Prairie, Minn., now include people weighing in on the dismissal of Superintendent Daniel Ludvigson by the school board. (Christopher Vondracek)
School board members say Ludvigson has repeatedly shown he is not ready for the prime time of a school district bigger than the one in central North Dakota he arrived from two years ago. They have twice disciplined Ludvigson, but did not state the reason for placing him on “special assignment,” beyond insinuating that staff are fearful to raise official complaints.
Star Tribune
Snow and rain on Halloween
Rain and potentially heavy snow are on tap Thursday around the Twin Cities, just before families set out for Halloween trick-or-treating.
Temperatures were expected to drop throughout the day, creating conditions for flurries. A winter weather advisory is in effect from 10 a.m. to 4 p.m. covering the Twin Cities metro area and parts of south-central Minnesota. Steady rain drenched the Twin Cities on Thursday, making for a soggy morning commute.
“As colder air begins to move in this morning, the rain will transition to heavy snow from west to east with snowfall rates of an inch per hour at times into early afternoon,” the National Weather Service in Chanhassen said in a weather advisory.
The Twin Cities and surrounding areas could get between 2 and 4 inches of snow, according to the weather service. The winter weather advisory is expected to affect Anoka, Chisago, Hennepin, Ramsey, Scott, Washington and Le Sueur counties.
It’s unclear how much of the snow will actually stick, with warm surface temperatures likely leading to melting on contact in many areas.
“Exact totals will depend on snowfall rate, surface temperatures, and melting — which increases uncertainty with the snow forecast,” the weather service said in an early Thursday briefing.
“Thundersnow possible!” the weather service emphasized.
The good news for Halloween revelers is that the snow and rain are expected to wrap up in time for trick-or-treating, though temperatures will remain in the 30s with a sharp windchill.
Star Tribune
Alcohol use suspected by off-duty deputy in injury crash in Afton, patrol says
An off-duty Washington County sheriff’s deputy caused a head-on crash while under the influence of alcohol and injured a couple in the other vehicle, officials said.
The crash occurred about 10:40 a.m. Sunday in Afton on Hwy. 95 at Scenic Lane, the Minnesota State Patrol said.
Campbell Johnston Blair, 58, of Hastings, was heading north in his Subaru Crosstrek, crossed into the opposite lane and collided with a southbound Ford Expedition, the patrol said.
Blair and the other vehicle’s occupants, 38-year-old Erik Robert Sward and 36-year-old Heather Lynn Sward, both of Lake Elmo, were taken to Regions Hospital with non-critical injuries, according to the patrol.
The patrol noted the alcohol use by Blair was involved in the crash.
Blair, who was driving a private vehicle at the time of the crash while off-duty, has been a deputy with the Sheriff’s Office since 2020 and is currently assigned to our Court Security Unit.
The Sheriff’s Office has been asked for reaction to the crash involving one of its deputies.