Minnesota has reciprocity agreements with Michigan and North Dakota. A taxpayer is not subject to Minnesota income tax if, in 2023:
- They were a full-year resident of Michigan or North Dakota and returned to their home state at least once a month
- Their only Minnesota income was from the performance of personal services (wages, salaries, tips, commissions, bonuses)
Do I need to file a nonresident return for the reciprocal state?
If a Minnesota resident erroneously had income tax withheld for a reciprocal state on salaries and wages earned there, a nonresident return for the reciprocal state will need to be filed to get a refund of the taxes withheld.
If the other state is Michigan
- Add or Edit Nonresident Michigan Return
- Nonresident & Part Year Income Allocation
- Income Allocation
- Wages and Salaries
- Adjustments to State Wages - Enter the wages for Michigan as a negative.
To claim exempt from future withholdings, file form MI-W4 with the taxpayers employer.
If the other state is North Dakota
- Add or Edit Nonresident North Dakota state return
- Select the Other State/Territory of Residency
- Select Where the Majority of Your Income Was Earned
- Review return for accuracy
If the taxpayer wishes to claim exemption from future withholdings, they need to file form NDW-R with their employer.
If the taxpayers wages are covered by reciprocity and they do not want their employer to withhold Minnesota tax in the future, they need to file Form MWR, Reciprocity Exemption/Affidavit of Residency, each year with their employer.
Additional Information: