What is the Minnesota credit for taxes paid to another state?

If you were a Minnesota resident for all or part of 2021 and you paid income tax to both Minnesota and another state on the same income, you may be able to reduce your tax. A Canadian province or territory and the District of Columbia are considered states for purposes of this credit.

If you were a resident of another state, but are required to file a 2021 Minnesota income tax return as a Minnesota resident, you may be eligible for this credit. To be eligible, you must have paid 2021 state tax on the same income to both Minnesota and your state of residence. You must get a statement from the other state’s tax department stating ineligibility to receive a credit on that state’s return for income tax paid to Minnesota. Include this statement with your Form M1.

If you claimed a federal foreign tax credit and you included taxes paid to a Canadian province or territory, you cannot use these same taxes paid to determine your Minnesota credit. If you qualify, complete Schedule M1CR, Credit for Income Tax Paid to Another State, and include the schedule with Form M1.

If you paid income tax to Wisconsin: A portion of your credit may be refundable. Complete Schedule M1RCR, Credit for Tax Paid to Wisconsin, and include the schedule with Form M1.

If you worked in Michigan or North Dakota: Do not file Schedule M1CR if you were a full- or part-year Minnesota resident and had 2021 Michigan or North Dakota income tax withheld from personal service income (such as wages, salaries, tips, commissions, and bonuses) you received from working in one of those states. Instead, file that state’s income tax return to get a refund of the tax withheld for the period of time you were a Minnesota resident.

To get the other state’s income tax form, call that department or go to their website:

• Michigan Department of Treasury, 517-373-3200, www.michigan.gov/treasury

• North Dakota Office of State Tax Commissioner, 701-328-1243, www.nd.gov/tax