Minnesota North Dakota Reciprocity Agreement

Under the reciprocity agreement, compensation granted to a Minnesota resident for personal or professional services in North Dakota is exempt from north Dakota income tax if the person permanently resides in Minnesota, where the person returns at least once a month while providing the services in North Dakota. “remuneration for personal or professional services” means salaries, tips and commissions received by an employee by an employer and, in limited cases, distributions from a partnership. If your salary is covered by reciprocity and you do not want your employer to retain Minnesota tax in the future, submit the MWR, Reciprocity Exemption/Affidavit of Residency, form annually to your employer. Reciprocity prevents both states from taxing the same “personal service income” (salaries, wages, tips, commissions, fees or bonuses). As a general rule, only your country of origin taxes the personal service income received by an employer in a mutual state. In this case, you will only have to file a refund in your country of origin and not in both states. With effect from September 1975, the states of Minnesota and North Dakota adopted a reciprocal tuition agreement. This means that legal Minnesota residents and their loved ones can visit North Dakota State University and pay special tuition lower than the non-resident rate. The Minnesota Office of Higher Education determines whether a student is licensed. If you received reciprocal wages and your employer withheld income tax in Minnesota or Montana, you must file a declaration of non-residency with the relevant state in order to obtain a refund of the amount withheld.

If you reside in Minnesota, you can file an income tax return with the mutual state to refund the withholding tax. In addition, you must file an income tax return for Minnesota if you meet the minimum filing requirement for the year. You may not need Michigan or North Dakota income tax for personal service income earned in these countries. For more information, please contact the tax department of the mutual state. Minnesota has reciprocal agreements with Michigan and North Dakota. You are not subject to income tax in Minnesota if in 2020: The wages you received to work in North Dakota are subject to North Dakota income tax unless they are exempt under the North Dakota-Minnesota Income Tax Reciprocity Agreement. . . .