Secretary Roger M. Ervin of the Wisconsin Department of Revenue announced a special withholding arrangement for employers of Wisconsin residents working in Minnesota in response to the termination by Minnesota of the Minnesota-Wisconsin reciprocity agreement effective January 1, 2010. Under the arrangement, Wisconsin withholding will not be required in the following situations:
- The employee is a legal resident of Wisconsin (i.e., domiciled in Wisconsin) when the wages are earned in Minnesota, and
- The same wages earned by the Wisconsin resident and subject to the withholding of Minnesota income tax would also be subject to the withholding of Wisconsin income tax.
Employees may need to pay Wisconsin estimated tax if the elimination of Wisconsin withholding would cause them to owe $200 or more in Wisconsin income tax.
Contact Vision Payroll if you have further questions on the special withholding arrangement.