Minnesota Income Tax Withholding Instruction Booklet And Tax Tables - 2018 Page 5
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34Withholding Requirements
(continued)
The person responsible for paying the
Non-Minnesota contractors can apply for
You can submit your contractor affidavit in
entertainment entity must deduct the tax
an exemption from the surety deposit re-
either of the following ways:
and send it to us.
quirements by filing Form SDE, Exemption
• Electronically using e-Services (print-
from Surety Deposits for Non-Minnesota
able confirmation page available imme-
Report and pay the nonresident entertainer
Contractors, with us before the project be-
diately upon approval)
tax on Form ETD, Nonresident Entertainer
gins. An SDE form must be filed for each
Tax, Promoter’s Deposit Form, by the end
• By mail using Form IC134 (approval in
project. If the exemption is approved, we
of the following month. File Form ETA,
4 to 6 weeks)
will certify and return the form to the non-
Nonresident Entertainer Tax, Promoter’s
For details, see Fact Sheet 13.
Minnesota contractor, who then gives it to
Annual Reconciliation, by January 31 of the
you.
following year. Do not report the nonresi-
Residents Working Outside
dent entertainer tax with the income tax you
If the non-Minnesota contractor does not
Minnesota
withhold from your employees.
present an approved exemption Form SDE,
Minnesota Residents Working in Other
use Form SDD, Surety Deposits for Non-
The nonresident entertainer must file Form
States
Minnesota Contractors, to make the surety
ETR, Nonresident Entertainer Tax Return,
If you employ a Minnesota resident who
deposits. The non-Minnesota contractor
by April 15 of the following year.
works in another state (other than Michigan
may then apply for a refund using Form
For details, see Fact Sheet 11.
or North Dakota where reciprocity agree-
SDR, Refund of Surety Deposits for Non-
ments apply; see page 4), you may be
Minnesota Contractors, once they have
Other Types of Withholding
required to withhold tax for the state where
registered for and paid all state and local
Royalty Payments
the employee is working, for Minnesota, or
taxes for the project.
The payer of mining and exploration
for both.
For details, see Fact Sheet 12.
royalties is required to withhold income
To determine if you should withhold tax for
tax on royalty payments made for use of
Withholding Affidavits for Construction
the state in which the employee is working,
Minnesota land. The withholding rate is
Contractors
contact the other state. To determine if you
6.25 percent (.0625) of the royalties paid
In order to receive final payment from
are required to withhold Minnesota tax,
during the year.
a project performed for the state of
complete the worksheet below.
Minnesota, or any of its political subdivi-
Pension and Annuities
Minnesota Residents Working Outside the
sions (such as counties, cities, or school dis-
You may withhold Minnesota income tax
United States
tricts), a construction contractor must send
from pension and annuity payments if
If you employ a Minnesota resident who
us a Withholding Affidavit for Contractors
requested by the person receiving the pay-
works outside the United States, you are
when work on the project is complete. The
ment. If you agree to withhold, follow the
required to withhold Minnesota tax on
contractor must get an approved contractor
same rules as withholding on wages (see
wages that are subject to U.S. federal
affidavit in order to receive final payment.
page 6).
income tax withholding. See “Form W-2
Surety Deposits
Wage Allocation” on page 12.
If you contract with a non-Minnesota con-
struction contractor to perform construc-
tion work in Minnesota, you must withhold
8 percent (.08) of the payments when the
value of the contract exceeds $50,000.
Worksheet for Residents Working Outside Minnesota
1. Enter the tax that would have been withheld if the work had been performed in
Minnesota (use Minnesota tax tables) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Enter the tax you are withholding for the state in which the employee works . . . . . . . . . . . . . . . . . . 2
3. If line 1 is more than line 2, subtract line 2 from line 1.
Send this amount to the Minnesota Department of Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
If line 1 is less than line 2, do not withhold Minnesota income tax. Send the amount on line 2 to the state in which the employee is
working.
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