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Last Updated: 6/5/2017

Withholding for Residents of Another State Working in Minnesota

​If you are required to withhold federal income tax from a nonresident employee’s wages for work performed in Minnesota, you must also withhold Minnesota income tax in most cases.

Exception: You are not required to withhold Minnesota tax if the employee is a resident of Michigan or North Dakota, and he or she meets the reciprocity agreement provisions. (See Reciprocity).

Note: Wages earned while an employee was a Minnesota resident, but received while a nonresident, are subject to Minnesota withholding. Wages include all income for services performed in Minnesota, such as severance pay, equity-based awards, and other non-statutory deferred compensation.

For more information, see Fact Sheet 19, Nonresident Wage Income Assigned to Minnesota.