State Tax Withheld From Two Different States, What To Do?


S

Strandlee

Here is my situation:

My permanent address is in North Dakota, however as part of
attending college I live some of the year in Minnesota. In
2003 I held two jobs while in college and living in
Minnesota, one of which held out North Dakota state tax, the
other Minnesota state tax (both companies are located in
North Dakota). I planned on filing the North Dakota taxes
like I have been for the past several years but I have no
idea what to do about the Minnesota tax. I was told that I
only file with one state, is this true? If so what do I do
about this Minnesota money withheld?
 
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J

John H. Fisher

My permanent address is in North Dakota, however as part of
attending college I live some of the year in Minnesota. In
2003 I held two jobs while in college and living in
Minnesota, one of which held out North Dakota state tax, the
other Minnesota state tax (both companies are located in
North Dakota). I planned on filing the North Dakota taxes
like I have been for the past several years but I have no
idea what to do about the Minnesota tax. I was told that I
only file with one state, is this true? If so what do I do
about this Minnesota money withheld?
Reciprocity refers to agreements between Minnesota and the
states of Wisconsin, Michigan, and North Dakota. The
agreements simplify income tax filing for taxpayers who live
in one state and work in another.

If you were a full-year resident of Michigan or North Dakota
who returned to your home state at least once a month or
were a full-year Wisconsin resident, and your only Minnesota
income was from personal services (wages, salaries, tips,
commissions, bonuses), you are NOT subject to Minnesota
income tax.

For example; if you're a resident of Wisconsin who works in
Minnesota, you'll pay tax on your wages only to Wisconsin,
which would be your home state.

For types of income that do not qualify for reciprocity see
the Fact Sheet #4, Reciprocity.
http://www.taxes.state.mn.us/taxes/individ/index.shtml

Minnesota tax withheld
If Minnesota income tax was withheld from your wages and you
want to get a refund, you must file Form M1 and complete
Schedule M1W (Withholding Information). When you file, fill
in the appropriate amounts from your federal return on lines
A-D and line 1 of Form M1, skip lines 2 - 4. Fill in the
amount from line 1 on line 12 and write reciprocity and your
home state to the left of line 12. Complete the rest of Form
M1. You must attach your Schedule M1W, Schedule MWR,
(Reciprocity Exemption/Affidavit of Residency) or a
completed copy of your home state tax return. Do not
complete Schedule M1NR.

Hope this helps 'n' Good Luck!!=:)

"Jack" - John H. Fisher - (e-mail address removed)
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=:)
 
A

Arthur L. Rubin

Strandlee said:
Here is my situation:

My permanent address is in North Dakota, however as part of
attending college I live some of the year in Minnesota. In
2003 I held two jobs while in college and living in
Minnesota, one of which held out North Dakota state tax, the
other Minnesota state tax (both companies are located in
North Dakota). I planned on filing the North Dakota taxes
like I have been for the past several years but I have no
idea what to do about the Minnesota tax. I was told that I
only file with one state, is this true? If so what do I do
about this Minnesota money withheld?
I don't know specifically about MN and ND, but it looks to
me as if you would file an ND resident return on ALL your
income and an MN non-resident return on your MN income --
with the MN tax being an offset against your ND tax.

It seems to me that, because the money is earned in MN,
both companies should have withheld MN taxes -- but
there may be an offsetting arrangement between the
two states specifying that only ND taxes and ND returns
should be filed.
 
B

BILLW

Strandlee said:
Here is my situation:

My permanent address is in North Dakota, however as part of
attending college I live some of the year in Minnesota. In
2003 I held two jobs while in college and living in
Minnesota, one of which held out North Dakota state tax, the
other Minnesota state tax (both companies are located in
North Dakota). I planned on filing the North Dakota taxes
like I have been for the past several years but I have no
idea what to do about the Minnesota tax. I was told that I
only file with one state, is this true? If so what do I do
about this Minnesota money withheld?
You will have to file a part time resident form for Minn.

bw
 
C

CLJ1219

I was told that I
only file with one state, is this true?
I wouldn't listen to that person anymore.
If so what do I do
about this Minnesota money withheld?
File a Minnesota tax return, as either non-resident (if you
did not actually live there) or as part-year resident if you
lived there part of the year.

Carol

What can one expect of a day that begins with getting out of bed.
 
W

Wayne Brasch

Strandlee said:
Here is my situation:

My permanent address is in North Dakota, however as part of
attending college I live some of the year in Minnesota. In
2003 I held two jobs while in college and living in
Minnesota, one of which held out North Dakota state tax, the
other Minnesota state tax (both companies are located in
North Dakota). I planned on filing the North Dakota taxes
like I have been for the past several years but I have no
idea what to do about the Minnesota tax. I was told that I
only file with one state, is this true? If so what do I do
about this Minnesota money withheld?
You file with both States. File a resident tax return form
for the State in which you consider to be your permanent
home and a non-resident one for the one in which you worked
while out of the other. You will report all of your income
to your resident State and get a tax credit on it for the
taxes you have to pay to the other State.

Wayne Brasch, CPA, M. S. Taxation
 
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R

Redneck

Here is my situation:

My permanent address is in North Dakota, however as part of
attending college I live some of the year in Minnesota. In
2003 I held two jobs while in college and living in
Minnesota, one of which held out North Dakota state tax, the
other Minnesota state tax (both companies are located in
North Dakota). I planned on filing the North Dakota taxes
like I have been for the past several years but I have no
idea what to do about the Minnesota tax. I was told that I
only file with one state, is this true? If so what do I do
about this Minnesota money withheld?
File a non-resident return for the state of Minnesota. Any
taxes paid to Minnesota will be a credit against the state
of North Dakota.
 
J

John H. Fisher

You file with both States. File a resident tax return form
for the State in which you consider to be your permanent
home and a non-resident one for the one in which you worked
while out of the other. You will report all of your income
to your resident State and get a tax credit on it for the
taxes you have to pay to the other State.
Wayne, is that correct??? It was my understanding that
there was a reciprocal agreement betweenthese two states.
In that case, if I'm not mistaken, would he not file a claim
for taxes withheld by the one state and pay any liability to
his home state? Taxes should not have been withheld by the
other state in the first place, again, if I'm not mistaken!!

"Jack" - John H. Fisher - (e-mail address removed)
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=:)
 
J

John H. Fisher

(e-mail address removed) (Strandlee) wrote:
File a non-resident return for the state of Minnesota. Any
taxes paid to Minnesota will be a credit against the state
of North Dakota.
Redneck, is that correct??? It was my understanding that
there was a reciprocal agreement between these two states.
In that case, if I'm not mistaken, would he not file a claim
for taxes withheld by the one state and pay any liability to
his home state? Taxes should not have been withheld by the
other state in the first place, again, if I'm not mistaken!!

http://www.taxes.state.mn.us/taxes/individ/residency_and_filing_status/reciprocity/reciprocity.shtml

"Jack" - John H. Fisher - (e-mail address removed)
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=:)
 
D

Don Baaso

Strandlee said:
Here is my situation:

My permanent address is in North Dakota, however as part of
attending college I live some of the year in Minnesota. In
2003 I held two jobs while in college and living in
Minnesota, one of which held out North Dakota state tax, the
other Minnesota state tax (both companies are located in
North Dakota). I planned on filing the North Dakota taxes
like I have been for the past several years but I have no
idea what to do about the Minnesota tax. I was told that I
only file with one state, is this true? If so what do I do
about this Minnesota money withheld?
You should file a non-resident Minnesota return to report
income and withholding from there. Also file a North Dakota
return declaring all income and look for an "other state tax
credit" to prevent double taxation.

Don in Colorado
 
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K

Katie Jaques

Here is my situation:

My permanent address is in North Dakota, however as part of
attending college I live some of the year in Minnesota. In
2003 I held two jobs while in college and living in
Minnesota, one of which held out North Dakota state tax, the
other Minnesota state tax (both companies are located in
North Dakota). I planned on filing the North Dakota taxes
like I have been for the past several years but I have no
idea what to do about the Minnesota tax. I was told that I
only file with one state, is this true? If so what do I do
about this Minnesota money withheld?
Hey! All you guys! Jack is right! The rest of you are not
paying attention! <G>

There is a reciprocal agreement between Minnesota and North
Dakota. Follow the link in Jack's post (No. 9) for an
explanation.

There is just one clinker in this: in order to be eligible
for the reciprocal agreement, the taxpayer must have
returned to his home state at least once a month during the
year (Minn. Stat. § 290.081). There is an exception to that
rule for Wisconsin residents, but not for residents of ND.

So: Strandlee, if you returned to ND at least once a month
during the time you were working in MN, you have no MN tax
liability. You should file a nonresident MN return and
claim a refund of 100% of the tax that was withheld. And,
of course, you will owe tax to ND on 100% of your income.
Which means you may be under-withheld for ND.

On the other hand, if you did not go home at least once a
month while working in MN, then you should file a
nonresident MN return and report your earnings there as MN
source income. You will also file a resident return with ND
and pay tax on 100% of your income, claiming a credit for
the tax you paid to MN.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.
 
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