Minnesota Employment Law Update – January 2017
Withholding and Reporting – Definition of Wages
The Minnesota Department of Revenue has updated guidance on personal income withholding tax responsibilities related to the classification of wages and employees. Minnesota follows the federal provisions for determining taxable wages. Wages subject to federal and Minnesota income tax withholding include all pay given to an employee for services performed. The pay may be in cash or other forms, and it does not matter how the payments are measured or made. The guidance also notes that taxpayers are not required to withhold Minnesota income tax if the amount they expect to pay a nonresident employee is less than the minimum income requirement for filing a Minnesota personal income tax return. For 2017, this amount is $10,400. The fact sheet discusses common types of taxable wages; who is an employee; withholding income tax from wages; other types of withholding (unrelated to employee wages); and how to register to withhold taxes from employee wages.