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Withholding for Annuities and Pensions
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When filing your returns:
- Include the tax withheld amount in the total amount withheld field
- Indicate if your tax withheld is greater than your wages using the appropriate box
- Do not include the recipient of the pension payments in the number of employees field
- Do not include the payment amount in the wages field
Before 2022, Minnesota did not require withholding on annuity and pension payments. You may need to reach out to current recipients about the new requirement.
If, before 2022:
- You provided the option to withhold Minnesota income tax on distributions, you may continue following the recipient’s previous election. If they chose to have tax withheld, you may use the allowances they determined on a previous withholding allowance certificate.
- You did not provide the option to withhold Minnesota income tax on distributions, you must ask recipients to complete Form W-4MNP to either determine allowances or opt out of withholding on payments. If a recipient does not complete Form W-4MNP, you must withhold Minnesota tax using the Single filing status with zero allowances. Continue withholding at that rate until they provide you a completed Form W-4MNP.