Annuities and Pensions

​Minnesota does not require withholding on pension and annuity payments.  However, income tax may be withheld if the recipient requests it and the payer agrees to do so.

If you agree to withhold Minnesota tax:

• Have the recipient send you a completed federal Form W-4P, Withholding Certificate for Pension or Annuity Payments, which can be found at the IRS website.  
• Calculate the withholding amount using the tables in the Minnesota Income Tax Withholding Instruction Booklet. 

When completing your withholding tax return:

• 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.

To withhold tax, you must have a Minnesota tax ID.  If you do not have one already, you can register for a Minnesota tax ID through our e-Services system.