Wisconsin and Minnesota have not had a tax reciprocity agreement since January 1, 2010. Reciprocity agreements allow residents of one state to file a single income tax return with their home state if they work across the border and have no income in the other state besides wages, salaries, commissions, and fees reported on Form W-2. The lack of a reciprocity agreement affects people in Wisconsin and Minnesota.
Information for Workers
-
Wisconsin residents working in Minnesota
-
Minnesota residents working in Wisconsin
Information for Employers
-
Wisconsin employers that employ Minnesota residents
-
Minnesota employers that employ Wisconsin residents
-
I am a resident of Wisconsin working in Minnesota. How does the lack of a reciprocity agreement affect me?
Your Minnesota employer will withhold Minnesota income taxes from personal service income, such as salaries, wages, commissions and fees.
Your Minnesota employer will use the federal Form W-4 or the Minnesota W-4MN to determine the amount of Minnesota income tax to be withheld from your wages. Contact your Minnesota employer if you have questions about Form W-4 or Form W-4MN.
Will my employer withhold Wisconsin tax from my wages?
No, Wisconsin income taxes will not be withheld from that income. There is a
special withholding arrangement announced by the Secretary of Revenue.
Will I need to make Wisconsin estimated tax payments?
Every situation is different, but generally the credit for income tax paid to Minnesota will offset the Wisconsin income tax on the Minnesota wages, so estimated tax payments will not be required. However, if you have income not subject to withholding, such as interest, dividends, capital gains, unemployment compensation, etc., you may need to make
estimated tax payments.
What do I need to do?
- File a Minnesota income tax return as a nonresident. All personal service income earned in Minnesota will be reported to Minnesota.
- File a Wisconsin income tax return (Form 1). You will report all income received, including wages earned in Minnesota, on your Wisconsin return. Wisconsin will allow a credit for the net income tax paid to Minnesota on income that is taxed by both Wisconsin and Minnesota.
Questions?
If you have questions about Wisconsin income tax, contact the Wisconsin Department of Revenue:
If you have questions about Minnesota income tax, contact the Minnesota Department of Revenue:
-
I am a resident of Minnesota working in Wisconsin. How does the lack of a reciprocity agreement affect me?
Your Wisconsin employer will withhold Wisconsin income taxes from your personal service income such as salaries, wages, commissions and fees earned.
What do I need to do?
- File a
Form WT-4,
Employee's Wisconsin Withholding Exemption Certificate/New Hire Reporting, with your Wisconsin employer. Form WT-4 is used to determine the amount of Wisconsin income tax to be withheld from your wages. Contact your Wisconsin employer if you have questions about the completion of Form WT-4.
- File a Wisconsin nonresident income tax return (Form 1NPR) if your Wisconsin gross income was $2,000 or more. All wages earned in Wisconsin are taxable by Wisconsin.
- File a Minnesota income tax return. You will report all your worldwide income, including wages earned in Wisconsin, on your Minnesota tax return. Minnesota may allow a credit for income taxes paid to Wisconsin on income that is taxed by both Wisconsin and Minnesota.
Questions?
If you have questions about Wisconsin income tax, contact the Wisconsin Department of Revenue:
If you have questions about Minnesota income tax, contact the Minnesota Department of Revenue:
-
I am a Wisconsin employer that employs Minnesota residents. How does the lack of a reciprocity agreement affect me?
You must withhold Wisconsin income taxes on wages of Minnesota residents working in Wisconsin. You should ask these employees to complete a
Form WT-4. Form WT-4 is used to determine the amount of Wisconsin income tax to be withheld from employee wages.
You may not accept Form W-222, Statement of Minnesota Residency. Form W-222 was previously used by Minnesota residents working in Wisconsin to claim exemption from withholding of Wisconsin income taxes.
-
I am a Minnesota employer that employs Wisconsin residents. How does the lack of a reciprocity agreement affect me?
-
Minnesota Withholding – You must withhold Minnesota income taxes on the wages of Wisconsin residents working in Minnesota. Use Minnesota Form W-4MN to determine the amount of Minnesota income tax to be withheld from your employees' wages.
-
Wisconsin Withholding – Employers are not required to withhold Wisconsin income tax from wages of Wisconsin residents employed in Minnesota. The Secretary of Revenue has authorized a
special withholding arrangement for employers of Wisconsin residents working in Minnesota.
Note: Minnesota employers who no longer have a withholding obligation for Wisconsin should inactivate their Wisconsin withholding tax account.
Questions?
If you have questions about Wisconsin withholding tax, contact the Wisconsin Department of Revenue:
Applicable Laws and Rules
This document provides statements or interpretations of the following laws and regulations enacted as of November 11, 2024: secs. 71.03, 71.04, 71.07, 71.09, 71.10 and 71.64,
Wis. Stats., and secs. Tax 2.02 and 2.90,
Wis. Adm. Code.
Laws enacted and in effect after this date, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to this date, that is contrary to the information in this document is superseded by this document, according to sec. 73.16(2)(a), Wis. Stats.
Contact Us
MS 5-77
Wisconsin Department of Revenue
Customer Service Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2772
Fax: (608) 267-1030
Email:
DORIncome@wisconsin.gov
The department welcomes your input on our guidance.
Submit comments on this guidance document.
Guidance Document Number: 100220