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Reciprocity

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Minnesota has income tax reciprocity agreements with Michigan and North Dakota. These agreements may simplify tax filing for people who live or work in Minnesota and one of these states.

What is reciprocity?

Reciprocity prevents both states from taxing the same personal service income (wages, salaries, tips, commissions, fees, or bonuses). Generally, only your home state will tax the personal service income you receive from an employer in a reciprocity state. When this happens, you only need to file a return in your home state instead of in both states.

Do I qualify?

To qualify, all of these must be true:

  • You are a Minnesota resident who works in Michigan or North Dakota, or you are a Michigan or North Dakota resident who works in Minnesota
  • You receive personal service income from the reciprocity state
  • You return to your home state at least once a month

My Employer Withheld the Other State’s Tax

If you are a Minnesota resident, you can file an income tax return with the reciprocity state for a refund of the tax withheld. Also, you must file a Minnesota income tax return if you meet the minimum filing requirement for the year. You may not need Michigan or North Dakota income tax withheld for personal service income earned in these states. For details, contact the reciprocity state’s revenue department.

If you are a Michigan or North Dakota resident, you can file a Minnesota income tax return for a refund of the tax withheld. For more information, see Reciprocity Income Subtraction. To avoid having Minnesota tax withheld from your wages, complete Form MWR, Minnesota Reciprocity Exemption Certificate, and provide it to your employer. You must give your employer a completed Form MWR each year you do not want Minnesota income tax withheld.

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