Withholding Taxes: Minnesota

Federal law and guidance on this subject should be reviewed together with this section.

Authors: David Bahls and Kathi J. Wright, formerly of Lathrop GPM

Summary

• Whether an employee is a resident or nonresident of Minnesota determines whether the employee is subject to income tax withholding in the state. Different income tax withholding rules apply when a Minnesota resident works in another state, when a nonresident works in Minnesota, and when an expatriate works abroad. See Withholding on Residents, Nonresidents and Expatriates.
• Minnesota Form W-4MN, Minnesota Employee Withholding Allowance/Exemption Certificate, is used to determine state income tax withholding. See Employee Withholding Forms.
• Withholding on supplemental wage payments, such as bonuses, is calculated differently depending on whether or not the payments are made simultaneously with regular wages. See Supplemental Wages.
• Employers are required to provide certain information to employees on an annual basis. Minnesota employers must provide IRS Form W-2, Wage and Tax Statement, to current employees annually. See Form W-2 Requirements.
• Minnesota employers must maintain adequate records for a certain number of years. See Recordkeeping Requirements.