Minnesota Employment Law Update – January 2017

Minnesota

Income Withholding and Reporting – Withholding Responsibilities for New Employers

The Minnesota Department of Revenue has updated its guidance explaining the state’s personal income tax withholding and the tax responsibilities of a new employer. The fact sheet discusses registration for required identification numbers; federal requirements for new employees, including verification of work eligibility and Social Security numbers, Form W-4, Social Security and Medicare, and the federal unemployment tax; Minnesota requirements for new employees, including Form W-4MN, reciprocity, construction contractor withholding, state unemployment tax, worker compensation insurance, reporting of new hires; and other matters

Read Withholding Fact Sheet No. 10

Income Withholding and Reporting – Withholding Responsibilities for Household Workers

The Minnesota Department of Revenue has updated its guidance explaining the state’s personal income tax withholding and the tax responsibilities of household workers. According to the updated fact sheet, household workers are employees if the taxpayer controls not only what household work is done, but also how it is done. Taxpayers are not required to withhold Minnesota income tax from the wages of household employees. Taxpayers employing household workers are required to pay electronically if they:

  • Withheld more than $10,000 during the last 12-month period ending June 30;
  • Are required to electronically pay any other Minnesota business tax; or
  • Use a payroll service company.

All withholding tax returns, including past-due and amended returns, must be filed electronically using e-Services or by phone.

Read Withholding Fact Sheet No. 7

Income Withholding and Reporting – Withholding Responsibilities for Independent Contractors

The Minnesota Department of Revenue has updated its guidance explaining the state’s personal income tax withholding and the tax responsibilities of independent contractors. According to the updated fact sheet, to determine if an individual is an employee or an independent contractor, the business relationship between the employer and the individual performing the services must be examined and all evidence of control and independence must be considered. The fact sheet also discusses:

  • How to classify a worker (employees vs. independent contractors);
  • Steps for requesting a determination; and
  • How to handle the incorrect classification of workers.

Read Withholding Fact Sheet No. 8

Income Withholding and Reporting – Withholding Responsibilities for Agricultural Workers

The Minnesota Department of Revenue has updated its guidance explaining the state’s personal income tax withholding and the tax responsibilities of agricultural workers. The fact sheet has been updated to reflect current information about withholding tax from wages, registering for withholding tax, and filing and paying electronically. Taxpayers employing agricultural workers are required to pay electronically if they withheld more than $10,000 during the last 12-month period ending June 30, pay electronically any other Minnesota business tax, or use a payroll service company. If the agricultural workers are paying business taxes electronically for one year, they must continue to do so for all future years. All withholding tax returns, including past-due and amended returns, must be filed electronically using e-Services or by phone using e-File Minnesota.

Read Withholding Fact Sheet No. 3