Determination engine

Which state do you actually withhold in?

Reciprocity, convenience-of-the-employer, nonresident thresholds and unemployment localization, applied together to one employee's facts. Every answer cites the state source it came from.

Withhold Minnesota income tax.

The work state does not tax these wages, so the residence state governs.

Income tax withheld to

Minnesota

Graduated, top rate 9.85%

Employee certificate

None required

No state withholding allowance certificate applies.

Unemployment insurance

Wisconsin

Localized under factor 1: Localization.

Reciprocal agreement

Wisconsin has agreements, but not with Minnesota.

✓

Below the Wisconsin nonresident threshold

Wisconsin does not require nonresident withholding until Wisconsin-source wages exceed $1,500. You entered $0. Per Wisconsin Publication 166 (Withholding Tax Guide): an employer need not withhold Wisconsin tax from a nonresident employee where the employer can reasonably expect the employee's annual Wisconsin earnings to be less than $1,500; once the estimate exceeds $1,500 the employer must withhold from wages paid thereafter. Does not apply to interstate air carriers. Wisconsin does NOT accept the federal Form W-4 -- every newly hired employee must complete Form WT-4.

Track this, because it flips mid-year

Once the threshold is crossed, most states require withholding on all in-state wages for the year, not just the excess. Set an alert well before the limit.

Minnesota also taxes this income, with a credit

The residence state taxes worldwide income. The employee claims a credit on the Minnesota return for tax paid to Wisconsin, which prevents true double taxation but usually still leaves a balance if Minnesota's rate is higher. Some employers withhold for both states; many withhold only for Wisconsin and let the employee manage the difference.

Minnesota also runs a paid leave program

The employee resides in Minnesota, which has a mandatory paid leave program, but unemployment coverage is localized to Wisconsin. Check whether Minnesota requires coverage based on residence; several programs use a work-location test and a few do not.

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Employer registrations you will need

Minnesota — Income tax withholding: Minnesota Department of Revenue
Wisconsin — Unemployment insurance: Wisconsin Department of Workforce Development (DWD)

Wisconsin profile Minnesota profile Full write-up for this pair

Change the inputs

Withholding determination

Answer six questions. The result is a shareable link, so you can paste it into a ticket or an email.

Employee lives inState of residence

Work is performed inWhere the employee physically sits

Employer is based inWhere the work is directed from

Days in the work stateThis calendar year, leave blank if unknown

Wages from work-state daysUS dollars, leave blank if unknown

Arrangement Works remotely rather than at an employer location Remote work is an employer necessity, not employee preference

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This is a determination aid, not advice. StateSide encodes published state rules and applies them mechanically to the facts you enter. It does not know your entity structure, your nexus history, your equity compensation, or the dozens of exceptions that turn a clean rule into a judgement call. Every determination cites the state source it came from — verify against that source, and take anything consequential to a payroll tax professional before you act on it.