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Last Updated: 9/6/2018

Voluntary Withholding

When Minnesota tax withholding is not required, individuals receiving wages or payments may ask you as an employer or payer to withhold state tax. You may agree to withhold tax in these situations, but you are not required to do so.

When would I voluntarily withhold Minnesota tax?

Below are some common situations where you may voluntarily withhold tax from wages.
  • Clergy – If you are a qualified church organization, you may withhold state taxes when requested by a clergy member.
  • Household employees – Household workers are considered employees if you’re in charge of the “household work” they do and how they do it. “Household work” includes work done at your home by babysitters, nannies, health aides, private nurses, house cleaners, caretakers, yard workers, or similar domestic workers. For more information, see Withholding Fact Sheet 7 – Household Employees.
  • Minnesota employees covered by reciprocity – If you are a Michigan or North Dakota employer, Minnesota residents covered under reciprocity may ask you to withhold Minnesota income tax from their wages. While you are not required to withhold Minnesota tax, we suggest doing so as a courtesy to your employee. For more information, see Withholding for Residents of Reciprocity States.
You can also voluntarily withhold tax on certain payments. For more information on when and how to withhold tax from these payments, see the following webpages:

What if I agree to do voluntary withholding?

You must have a Minnesota Tax ID Number and withholding tax account before filing and paying withholding tax.

How much tax do I withhold?

You may do either of the following:
  • Use the supplemental withholding rate of 6.25 percent.
  • Have your employee or payee complete federal Form W-4 or Minnesota Form W-4MN. On Form W-4MN, they may specify a number of Minnesota exemptions or request a specific amount withheld from each payment.

What if I do not agree to do voluntary withholding?

Your employee or payee may have to pay estimated Minnesota income tax. You may direct them to our Estimated Tax page for more information.