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Last Updated: 7/26/2018

Withholding for Residents of Reciprocity States

Minnesota has income tax reciprocity agreements with Michigan and North Dakota. If your employee is a resident of one of those states, you are not required to withhold Minnesota income tax from their wages.

What if I’m a Minnesota business employing a Michigan or North Dakota resident?

Your employee must give you a completed Form MWR, Reciprocity Exemption/Affidavit of Residency, each year to claim exempt from Minnesota withholding. You must send completed Forms MWR to:

       Minnesota Revenue
       Mail Station 6501
       St. Paul, MN 55146-6501
 

Your employee may ask you to withhold income tax for their state of residence. While you are not required to withhold, we encourage you to do so as a courtesy to your employee. If you agree to withhold, contact the appropriate state for more information.

What if I’m a Michigan or North Dakota business employing a Minnesota resident?

Your employee may ask you to withhold Minnesota income tax. While you are not required to do withhold Minnesota tax, we encourage you to do so as a courtesy to your employee. If you agree to withhold, you must have a Minnesota Tax ID Number and withholding tax account.
 

For more information, see Withholding Fact Sheet 20 - Reciprocity.