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Last Updated: 6/1/2018

Annuities and Pensions

Minnesota does not require withholding on annuity and pension payments. However, you may withhold Minnesota income tax if the recipient requests it and you agree to do so.

What if I agree to withhold on annuities and pensions?

You must have a Minnesota Tax ID Number. If you do not have a Minnesota ID number, you can register for one online or by phone. You must also have an active withholding tax account. Log in to our e-Services system to add a withholding tax account.

Once you have a Minnesota ID number and withholding tax account:
 
  1. Have the recipient complete and send you federal Form W-4P, Withholding Certificate for Pension or Annuity Payments.
  2. Calculate the withholding amount using the tables in the Minnesota Income Tax Withholding Instruction Booklet.
  3. Send federal Form 1099-R to the Minnesota Department of Revenue by January 31 each year.

How do I report Minnesota withholding on my withholding tax returns?

When completing your returns:
 
  • Do not include the recipient of the pension payments in the “number of employees” field.
  • Do not include the amount of the payment in the “wages” field.
  • Include the tax withheld amount in the “total amount withheld” field.
  • If needed, check the appropriate box to indicate your tax withheld is greater than your wages.