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MN · payroll profile

Minnesota

Everything an out-of-state employer needs before running a Minnesota payroll: what to withhold, which form the employee signs, whether reciprocity applies, and who to register with.

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Personal income tax
Graduated to 9.85%
Reciprocal agreements
2 states
SUI wage base 2026
$44,000
Local income taxes
No

Income tax withholding

Imposes wage income tax Yes
Rate structure Graduated, top marginal rate 9.85%
Withholding certificate W-4MN
Minnesota Employee Withholding Allowance/Exemption Certificate
Accepts federal Form W-4 No
Convenience-of-the-employer rule No
Nonresident withholding threshold $15,300 of in-state wages
Minnesota withholding is keyed to the annually indexed minimum filing requirement for Minnesota-source income; Tax Foundation reports $15,300 of Minnesota-source income for 2026. This figure comes from Tax Foundation, not a Minnesota DOR page -- verify the current-year amount with the Minnesota Withholding Tax Instruction Booklet before relying on it.
Local income taxes No
No local personal income or wage taxes. Minnesota's Paid Leave program employee premium began in 2026.

Reciprocity

Minnesota exempts residents of 2 states from Minnesota withholding, provided the employee files MWR with the employer.

MichiganNorth Dakota
Michigan and North Dakota only. The Minnesota-WISCONSIN agreement was TERMINATED effective tax year 2010 and has not been reinstated -- do not apply reciprocity between MN and WI. Form MWR must be filed by February 28 each year (or within 30 days of starting work or changing residency), and the employee must return to their home state at least once a month to qualify.

States that exempt Minnesota residents

A Minnesota resident working in these states files that state's certificate and is taxed only by Minnesota.

District of ColumbiaMichiganNorth Dakota

Unemployment insurance and paid leave

Taxable wage base 2026 $44,000
2025 base was $43,000.
New employer rate varies by industry
New employers are assigned the average rate for their industry, so there is no single statewide new-employer rate. Rate range excludes the additional base tax and federal loan interest assessment.
Experience rate range 0.4% – 9.3%
Experience-rating method benefit ratio
Employee UI contribution No
Paid family / medical leave Yes
NEW FOR 2026: Minnesota Paid Leave premiums AND benefits both began January 1, 2026. The 2026 premium is 0.88% of wages up to $185,000; employers must pay at least 50% and may deduct up to 0.44% from employees. Employers with 30 or fewer employees and low average wages qualify for a reduced 0.66% total rate. First premium payment is due April 30, 2026.

Employer registration

Tax agency
Minnesota Department of Revenue
UI agency
Minnesota Department of Employment and Economic Development (DEED)

Sources

revenue.state.mn.us · revenue.state.mn.us · revenue.state.mn.us · mn.gov · oui.doleta.gov · oui.doleta.gov · oui.doleta.gov · payroll.org · pl.mn.gov

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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.