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Cannabis Income Tax Subtraction

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Licensed cannabis or hemp businesses and medical cannabis manufacturers may qualify to subtract expenses that were not allowed on the federal return.

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For Tax Years 2023 and After [+]

For tax years beginning after December 31, 2022, the subtraction was expanded to include non-medical licensed cannabis or hemp businesses.

Licensed cannabis businesses are allowed the cannabis income tax subtraction for expenses that were not allowed on your federal return under Internal Revenue Code, section 280E. The expenses must be related to the business of cannabis or hemp.

To qualify, you must be a licensed cannabis or hemp business with the Office of Cannabis Management.

For Tax Years 2019 to 2022 [+]

Minnesota Cost of Goods Sold [+]

Claim the Subtraction [+]

If you are filing as a	Claim the subtraction on
C corporation	Form M4, Corporation Franchise Tax Return
Fiduciary	One of these: Form M2, Income Tax Return for Estates and Trusts Schedule M2SB, Income Tax Computation for S Portion of ESBT Schedule KF, Beneficiary’s Share of Minnesota Taxable Income
Individual or sole proprietor	Schedule M1MB, Business Income Additions and Subtractions
Partnership	One of these: Schedule KPC, Partner’s Share of Income, Credits, and Modifications Schedule KPI, Partner’s Share of Income, Credits, and Modifications
S corporation	Schedule KS, Shareholder’s Share of Income, Credits, and Modifications

Contact Info

Contact form

Phone

651-556-3075

Hours [+]

Address [+]

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Last Updated

April 28, 2025