How does Minnesota tax remote workers?

There are a few situations to consider. You may fall into more than one category.

1. I lived in Minnesota.
• If you're considered a full-year or part-year resident of Minnesota, you'll be taxed on all income earned from any source during your time of residency. Be sure to file the appropriate return.
2. I worked remotely from Minnesota.
• Minnesota taxes income earned for personal services performed while in Minnesota (even if you're a nonresident). This includes remote work for an employer or clients based outside Minnesota if you were physically in the state while doing the work.
• You may be able to claim a credit for taxes paid to another state on your Minnesota resident return for any income required to be reported in multiple states. There is a special form, Schedule M1RCR, if you had income tax withholdings to both Minnesota and Wisconsin on the same income. Also, if you were a resident of Michigan or North Dakota, you may not have to pay any income tax and can file a Minnesota nonresident form M1NR to claim a refund.
3. My employer was based in Minnesota.
• If your employer was based in Minnesota, they may have withheld Minnesota taxes from your wages as shown on your W-2. However, as long as you didn't live or work in Minnesota, you will not owe Minnesota taxes on those wages and can file a nonresident return to claim a refund of those withholdings.
• If your employer didn't withhold Minnesota taxes and you were a nonresident of Minnesota, you probably don't need to file a Minnesota return at all unless you otherwise have a Minnesota nonresident filing requirement.

If your wages were minimal and you didn't do any other business in Minnesota, it's possible you will be exempt from filing regardless of residency. See the Minnesota form M1 instructions for more information.