The Minnesota IG260 form is a semiannual statement that must be filed by surplus lines brokers, detailing the premiums for nonadmitted insurance. This form encompasses reporting for specific periods within the year and mandates whether payments are due or refunds are expected based on the calculated premiums, fees, and commissions for insurance policies handled. Perfect compliance with filling out and submitting this document is crucial for brokers to ensure accurate fiscal responsibilities are met.
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Navigating the complexities of insurance taxation can be a daunting task, yet understanding the Minnesota Ig260 form is crucial for surplus lines brokers in the state. This form, formally known as the "2021 Nonadmitted Insurance Premium Tax Return for Surplus Lines Brokers," plays an essential role in the compliance and reporting landscape of nonadmitted insurance transactions. Designed for two specific reporting periods within the year, each with its own due date, it caters to both the brokers who have seen a busy half and those who might have not recorded any activity. Intricacies like calculating the taxable gross premiums after considering returns, identifying the correct tax rate, and figuring out the total amount due or overpaid require careful attention. Moreover, the IG260 form isn't just about crunching numbers; it's about adhering to the Minnesota statutes and ensuring that every surplus lines broker, regardless of the volume of business transacted, complies with the latest legal requirements. These include but are not limited to, electronic payment mandates for those who've crossed the stipulated threshold in the previous year, detailed guidelines on filing amendments or reporting no activity, and nuanced instructions on completing the form accurately to avoid any penalties or interest on late submissions. With mandatory electronic payments for qualifying brokers and the option for check payments for others, alongside specific directives on how to apply for a Minnesota tax ID, this form encapsulates a comprehensive procedure aimed at streamlining the tax reporting process for nonadmitted insurance in Minnesota.
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2022 IG260, Nonadmitted Insurance Premium Tax Return for Surplus Lines Brokers
For the period of (check one):
Jan. 1 - June 30, 2022
(Due Aug. 15, 2022)
July 1 - Dec. 31, 2022
(Due Feb. 15, 2023)
Check if:
Amended Return
No Activity Return
Name of Surplus Lines Broker
License Number
Date Licensed
Type
Agency Name
Check if New Address
Minnesota Tax ID Number—Required (see instructions)
Mailing Address
Social Security Number (last 4 digits)
or
Print
City
State
Zip Code
Contact Person
Email Address
Website Address
Daytime Phone
Fax Number
Calculate the Amount Due/Overpaid
Sign Here
1
Total premiums (from page 2, column G)
. . .
.
1. .
. . . . . . . . . . . . .
2
Total fees and commissions (from page 2, column H)
. . . . .
3
Total gross premiums (from page 2, column I)
.3.
. . . . . . . . . . . . . .
4
Total return premiums (from page 2, column J) . Enter as a positive number
.4.
. . . . . . .
5
Taxable gross premiums (subtract line 4 from line 3)
. . . .
5. .
. . . . . . . . . . .
6
Tax rate is 3% (.03)
6. .
. . . . . . .03
7
Total tax (multiply line 5 by line 6)
.7 .
8
Penalty (see instructions)
. .
8.
. . . . . . . . . .
9
Interest (see instructions)
9.
. . . . . . . .
10
TOTAL AMOUNT DUE or (overpaid) (add lines 7 through 9)
.10. .
If you owe additional tax (make separate payments for each period):
Payment method: Electronic payment Check (payable to Minnesota Revenue; write MN tax ID number on check; attach voucher)
Enter amount paid
Date paid
(If amount paid is different from amount due on line 10, attach an explanation.)
If you overpaid: overpayments will be refunded.
I declare that this return is correct and complete to the best of my knowledge and belief.
Signature of Broker
Date
I authorize the Minnesota
Department of Revenue
to discuss this tax return
Signature of Preparer
Print Name of Preparer
with the preparer.
Mail to: Minnesota Department of Revenue, Mail Station 1780, 600 N. Robert St., St. Paul, MN 55145-1780
(Rev. 9/21)
IG260
page 2
2022 Nonadmitted Insurance Premium Tax Return for Surplus Lines Brokers (continued)
A
B
C
D
E
F
G
H
I
J
NAIC
Effective Date
Trans
Total
All Fees/
Total Gross
Return
Number
Name of Insurer
Policy Number
(required)
Name of Insured
Type*
Premiums
Commissions
Premiums (G + H)
* See “Page 2, Column instructions” for a list of codes to enter in
Subtotal (if more than one page)
column F.
Total. (Enter on appropriate lines on page 1) . . . .
2022 Form IG260 Instructions
For insurance tax laws, see Minnesota Statutes, Chapter 297I at www.leg.state.mn.us.
All surplus lines brokers that write or are authorized to write nonadmitted insurance must file Form IG260, Semiannual Statement of Surplus Lines Insurance, even if there is no activity or tax liability to report during the period. (M.S. 297I.05, subd. 7).
Filing Requirement
Effective July 21, 2011, the Nonadmitted and Reinsurance Reform Act of 2010 (NRRA) permits only the insured’s home state to require the payment of premium tax for nonadmitted insurance.
When Minnesota is the home state of the insured, as provided under M.S. 297I.05, subd. 7, 100% of the gross premiums are taxable in Minnesota with no allocation of the tax to other states.
“Home state” means the state in which an insured maintains its principal place of business, or in the case of an individual, the individual’s principal residence.
However, if 100% of the insured risk is located outside Minnesota, then the insured’s home state is the state to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated.
Minnesota Tax ID Required
Surplus lines insurance brokers are required to have their own Minnesota tax ID number. This is not a Social Security number or agency Minnesota tax ID number.
If you don’t have a Minnesota tax ID, you can apply online. Go to our website at www.revenue.state.mn.us and click “Register for a Minnesota tax ID number” on the e‑Services menu. Note: During the process, be sure to select “Sole proprietor” as the type of legal organization. Use
NAICS classification number 524210.
If you don’t have access to the Internet, call 651‑282‑5225 or 1‑800‑657‑3605 to register by phone.
Due Dates
File Form IG260 with all required attachments and pay any tax due by:
•Aug. 15 (for the six‑month period ending June 30)
•Feb. 15 of the following year (for the six‑month period ending Dec. 31) This form must be filed even if no tax is due for the period.
The U.S. postmark date, or date recorded or marked by a designated delivery service, is considered the filing date (private postage meter marks are not valid). When the due date falls on a Saturday, Sunday or legal holiday, returns and payments electronically made or postmarked on the next business day are considered timely. When a return or payment is late, the date it is received at the Department of Revenue is treated as the date filed or paid.
Extension for Filing Return. If good cause exists, you may request a filing extension.
Rules for Using Spreadsheets
If you are using your own spreadsheet, you must include all the information and in the same format as on page 2 of Form IG260, including subtotals on each page. Your filing will not be considered complete if all information, including subtotals, is not included.
If you have more than two pages of surplus lines insurance, submit an electronic file in addition to the printout. The files must be in a Microsoft Excel format.
Payments
Electronic Payments
If your total insurance taxes and surcharges for the last 12‑month period ending June 30 is $10,000 or more, you are required to pay your tax electronically in all subsequent years.
You must also pay electronically if you’re required to pay any Minnesota business tax electronically, such as withholding tax.
To pay over the Internet, go to the department’s website at www.revenue.state.mn.us and login. You’ll need your user name, password and bank routing and account numbers. When paying electronically, you must use an account that is not associated with any foreign banks.
If you use other electronic payment methods, such as ACH credit method or Fed Wire, instructions are available on our website or by calling our Business Registration Office at 651‑282‑5225 or 1‑800‑657‑3605.
Submit separate payments for each return.
Continued 1
2022 Form IG260 Instructions (continued)
Check Payments
If you’re not required to pay electronically and are paying by check, visit our website at www.revenue.state.mn.us and click on “Make a Payment” and then “By check” to create a voucher. Print and mail the voucher with a check made payable to Minnesota Revenue.
When you pay by check, your check authorizes us to make a one‑time electronic fund transfer from your account, and you may not receive your canceled check.
How to Complete the Form
Complete page 2 before page 1 of Form IG260.
Page 2, Column Instructions
A. NAIC Number
Enter the NAIC number.
B. Name of Insurer
List the insurers. Include policies for insurance companies without NAIC numbers.
C. Policy Number
The policy number (modified by the month and year that the policy was issued) is the controlling number for reporting surplus lines policies and any subsequent activity during the policy period, i.e., endorsements, audits and/or cancellations.
D. Effective Date (required)
Enter the effective date of the transaction.
E. Name of Insured
Provide the name of the insured.
F. Policy Transaction Type
Enter one of the following numbers:
1= New business 4 = Audit
2 = Renewal
5 = Reinstatement
3= Cancellation 6 = Endorsement
G. Total Premiums
Include all premiums paid by companies with a home state of Minnesota for risks located in the United States and U.S. territories.
H. Total Fees and Commissions (excluding stamping fee)
Include all fees and commissions paid by policyholder to obtain coverage that are not included in premiums.
I. Total Gross Premiums
Total premiums and all fees and commissions (column G plus column H).
J. Return Premiums
Enter all return premiums. Include a note indicating on which return the original policy was reported. Return premiums can only be claimed by the broker where the premiums and taxes were originally reported.
Page 1, Line Instructions
Check Boxes
At the top of the form, check if the return is:
•an Amended Return: Check only if you are amending a previously filed return for the same period. Include all original and corrected policies on the amended return.
•a No Activity Return: Check only if you did not have any activity during the period.
Line 4 — Total Return Premiums
Enter all return premiums as a positive number.
Line 5 — Taxable Gross Premiums
Gross premiums include fees and commissions.
Line 8 — Penalty
Late Payment. If you don’t pay all the tax due by the due date, a late payment penalty is due. The penalty is 5% of the unpaid tax for any part of the first 30 days the payment is late, and 5% for each additional 30‑day period, up to a maximum of 15%.
Continued 2
Late Filing. Add a late filing penalty to the late payment penalty if your return is not filed by the due date. The penalty is 5% of the unpaid tax. When added to the late payment penalty, the maximum combined penalty is 20%.
Payment Method. If you are required to pay electronically and do not, an additional 5% penalty applies to payments not made electronically, even if a paper check is sent on time.
Line 9 — Interest
You must pay interest on the unpaid tax plus penalty from the due date until the total is paid. The interest rate for calendar year 2022 is 3%. The interest rate may change for future years.
To figure how much interest you owe, use the following formula with the appropriate interest rate:
Interest = (tax + penalty) × # of days late × interest rate ÷ 365
Business Information Changes
Be sure to let us know within 30 days if you change mailing addresses, phone numbers, or any other business information. To do so, go to our website, login to e‑Services and update your profile information. By notifying us, we will be able to let you know of any changes in Minnesota tax laws and filing requirements.
Information and Assistance
Website: www.revenue.state.mn.us
Email: insurance.taxes@state.mn.us
Phone: 651‑556‑3024
This material is available in alternate formats.
For questions about licensing and regulations, contact the Minnesota Department of Commerce:
Website: www.mn.gov/commerce
Email: licensing.commerce@state.mn.us
Phone: 651‑539‑1599 or 1‑800‑657‑3978
Fax: 651‑539‑0107
For questions about stamping fees, contact the Surplus Lines Association of Minnesota (SLAM):
Website: www.mnsla.com
Email: nschroeder@mnsla.com
Phone: 320‑679‑4244
Filling out Form IG260 in Minnesota, the Nonadmitted Insurance Premium Tax Return for Surplus Lines Brokers, is a crucial step in ensuring compliance with state tax laws. This guide is designed to simplify the process, providing a straightforward route from start to finish. By following the steps closely, brokers can fulfill their obligations accurately, avoid common pitfalls, and ensure they meet all state requirements. The task may seem daunting, but with careful attention to detail, it is entirely manageable.
Completing Form IG260 is a methodical process that demands attention to detail and understanding of the instructions provided. With all sections accurately filled, brokers contribute to the proper administration of nonadmitted insurance premium taxes in Minnesota. For any uncertainties or need for further clarification, the Minnesota Department of Revenue and the outlined resources are available to assist.
What is the purpose of the Minnesota IG260 form? The Minnesota IG260 form is designed for surplus lines brokers to report and pay premium taxes on nonadmitted insurance. This semiannual statement is crucial for ensuring compliance with Minnesota's insurance tax laws, outlined in Chapter 297I of the Minnesota Statutes. It helps the state in regulating and taxing insurance transactions that are not covered by insurance companies licensed in Minnesota.
Who needs to file the IG260 form? All surplus lines brokers who are either writing or are authorized to write nonadmitted insurance in Minnesota must file the IG260 form, regardless of whether there was any activity or tax liability during the reporting period.
What are the due dates for filing the IG260 form? The form must be filed twice a year, with due dates on August 15th for the period covering January 1st to June 30th, and on February 15th of the following year for the period covering July 1st to December 31st. If these dates fall on a Saturday, Sunday, or legal holiday, filings and payments made on the next business day are considered timely.
What information is required on the IG260 form? The form requires detailed information including the surplus lines broker's name, license number, Minnesota tax ID number, contact information, and the total premiums, fees, and commissions associated with nonadmitted insurance transactions. It also necessitates detailed transaction records on Page 2, such as the NAIC number, insurer name, policy number, and premiums.
How is the tax calculated on the IG260 form? Taxable gross premiums are determined by subtracting any return premiums from the total gross premiums. The applicable tax rate is 3%. The final tax due, along with any penalties and interest for late payments, is calculated and reported in the total amount due section of the form.
Are electronic payments required? Brokers whose total insurance taxes and surcharges for the last 12-month period ending June 30 exceeded $10,000 are required to pay any subsequent taxes electronically. This requirement also applies to brokers who are mandated to make any Minnesota business tax payments electronically.
What should I do if I need to amend a previously filed IG260 form? If you need to amend a return for any reason, you should check the "Amended Return" box at the top of the form. The amended return must include all original and corrected policies for the same period. It's important to ensure that all information provided is accurate and complete to avoid potential penalties.
Where can I find assistance if I have questions while filling out the form or need to make changes to my business information? For questions regarding the IG260 form or if you need to update your business information, you can contact the Minnesota Department of Revenue by visiting their website, sending an email to insurance.taxes@state.mn.us, or calling 651-556-3024. For changes in business information, log in to e-Services on the department's website and update your profile.
Filling out the Minnesota IG260 form, a Nonadmitted Insurance Premium Tax Return for Surplus Lines Brokers, requires attention to detail and understanding of the instructions to avoid common mistakes. Here are ten mistakes often made while completing this form:
By being mindful of these common errors and adhering to the instructions specified for the Minnesota IG260 form, Surplus Lines Brokers can avoid processing delays, penalties, or the need for amending the return. It’s all about the details.
Filing the Minnesota IG260 form, known as the Nonadmitted Insurance Premium Tax Return for Surplus Lines Brokers, is an important task for surplus lines brokers operating within the state. But, it's not the only document they need to manage. Several other forms and documents often accompany the IG260, each serving its specific purpose in ensuring compliance and facilitating the tax reporting process. Understanding these documents guarantees a smooth and efficient handling of tax-related responsibilities for surplus lines brokers.
Each document plays a role in the broader picture of insurance brokerage operations and tax compliance. From proving due diligence in selecting an insurer to authorizing electronic payments, these documents collectively ensure that brokers can effectively manage their regulatory obligations while serving the needs of their clients. Keeping accurate and up-to-date records of these forms not only aids in tax preparation and submission but also safeguards against potential non-compliance issues.
The Minnesota IG260 form shares similarities with the California SL1 form, "Surplus Line Tax and Stamp Return." Both forms are designed for surplus line brokers to report and pay taxes on nonadmitted insurance premiums. They require identifying information about the broker, calculation of premiums, and the tax due. The main difference is the state-specific regulations and tax rates they adhere to, with the IG260 form applying to Minnesota and the SL1 to California.
Another similar document is the New York ELANY form, officially the "Excess Line Association of New York Quarterly Tax Statement." Like the IG260, this form is for reporting tax on surplus lines insurance. It gathers details on total premiums collected, adjustments, and calculates taxes owed. Both forms ensure compliance with state laws governing nonadmitted insurance but differ in their specific requirements and the entity to which the taxes are paid.
The Texas SLT-2 form, or "Surplus Lines Insurance Premium Tax Return," is another analogous document. Required by the Texas Department of Insurance, it details the reporting and payment process for taxes on surplus lines insurance in Texas. Though serving a similar purpose to the Minnesota IG260, the SLT-2 form is specific to Texas' tax rates and applicable laws regarding surplus lines insurance.
Florida's "Surplus Lines Tax Filing" document, meanwhile, is tailored to surplus lines brokers operating within Florida. This form requires the broker to report the amount of insurance premiums sold and the applicable taxes due to the state. While it aligns with the IG260's goal of tax compliance for surplus line brokers, it incorporates Florida-specific tax rates and filing deadlines.
The Pennsylvania "Surplus Lines Tax Report" also parallels the Minnesota IG260 form. Designed for the reporting and remittance of taxes on nonadmitted insurance, it captures information on gross premiums and calculates the taxes owed to the Commonwealth of Pennsylvania. Despite its similar purpose, it diverges in the details and percentages of the tax rates imposed.
The Nevada "Surplus Lines Broker Quarterly Tax Report" is intended for the same audience and has a similar function as the IG260. Bro s in Nevada use it to report premiums and pay taxes on surplus lines of insurance. Although serving the same purpose, the form contains unique requirements and tax rates as dictated by Nevada law.
Last but not least, the Illinois "Surplus Line Insurance Premium Tax Return" form is geared toward the same activities as Minnesota's IG260. It facilitates the accurate reporting of taxable premiums collected by surplus lines brokers in Illinois and the subsequent tax payments to the state. While sharing the Minnesota form's objectives, it reflects the specific tax laws and instructions relevant to Illinois.
In conclusion, although these documents serve a comparable role in ensuring that surplus lines brokers report and remit taxes on nonadmitted insurance premiums, they are uniquely tailored to the regulations, tax rates, and specific filing requirements of their respective states. Each form is an essential tool for compliance and financial reporting within the specialized field of surplus lines insurance.
Understanding the Minnesota IG260 form is key when working as a Surplus Lines Broker. Ensuring accuracy and timeliness in your submissions can help avoid potential penalties and keep your operations smooth. Here's a breakdown:
Do:
Don't:
When dealing with the Minnesota IG260 Form, a Nonadmitted Insurance Premium Tax Return for Surplus Lines Brokers, there are several misconceptions that often arise due to its specialized nature and the complexity of tax laws governing surplus lines insurance. Understanding these misconceptions is key to ensuring accurate and compliant filings.
Misconception 1: The IG260 form is only for businesses with taxable activities within the filing period. Many believe that if no transactions occurred or no taxable premium was collected during the period, filing the IG260 form is unnecessary. However, all surplus lines brokers that are authorized to write nonadmitted insurance in Minnesota must file the form for each period, even if there is no activity or tax liability to report. This includes submitting a "No Activity Return" when applicable.
Misconception 2: Any state tax ID can be used for filing the form. It is commonly misunderstood that brokers can use a generic state tax ID or their Social Security Number to file. In reality, surplus lines insurance brokers must have their own Minnesota tax ID number specifically for reporting the tax on nonadmitted insurance. This requirement ensures accurate identification and processing of returns.
Misconception 3: The tax rate is negotiable or varies. Some may think that the tax rate applied to premiums can vary based on negotiations or other factors. The tax rate for nonadmitted insurance premiums in Minnesota is set at 3%, and this rate applies to all taxable gross premiums, without exceptions or alterations. Understanding this fixed rate is crucial for correctly calculating the tax due on the IG260 form.
Misconception 4: Electronic payment is optional for all filers. There is a belief among some brokers that electronic payment methods are a matter of convenience rather than requirement. If a surplus lines broker’s total insurance taxes and surcharges for the previous twelve-month period ending June 30 amount to $10,000 or more, electronic payment becomes a mandatory practice for all subsequent filings. This requirement aims to streamline the payment process and ensure timely receipt of funds.
By clarifying these misconceptions, surplus lines brokers can better navigate the requirements of the Minnesota IG260 Form, ensuring compliance and avoiding potential issues with their filings. Staying informed about specific filing obligations and procedural requirements is key to the successful management of tax liabilities for nonadmitted insurance in Minnesota.
Filing the Minnesota IG260 form is essential for all surplus lines brokers that write or are authorized to write nonadmitted insurance, regardless of actual activity or tax liability.
The form must be submitted semiannually, with deadlines on August 15th for the period ending June 30th, and February 15th of the following year for the period ending December 31st.
Electronic payments are mandatory for anyone whose total insurance taxes and surcharges for the last 12-month period ending June 30 is $10,000 or more, along with those required to make any Minnesota business tax payments electronically.
When calculating taxes, the form requires you to subtract total return premiums from total gross premiums to find the taxable gross premiums. The tax rate is then applied to determine the total tax due.
If a payment is late, penalties will apply including a late payment penalty of 5% of the unpaid tax for any part of the first 30 days late, and additional penalties for longer periods, up to a maximum of 15%. An additional penalty for late filing and an interest rate for unpaid taxes and penalties also apply.
To complete the form accurately, ensure that all required information from page 2, which includes detailed transaction data, is covered before filling out page 1, which summarizes the financial information and tax details.
The IG260 form mandates that surplus lines insurance brokers must have their own Minnesota tax ID number, which is distinct from a Social Security number or agency Minnesota tax ID.
A detailed understanding of these key takeaways simplifies the process of correctly filling out and using the Minnesota IG260 form.
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