There’s good news for area residents who live in Minnesota but work in Wisconsin according to State Representative Greg Davids (R-Preston) and State Senator Jeremy Miller (R-Winona).

Last session, the Legislature approved a provision that ensures these Minnesotans would not pay additional income taxes in the absence of a reciprocity agreement with Wisconsin, instead offering refundable income tax credits to those residents for taxes paid. Recently the Minnesota Department of Revenue notified its counterpart in Wisconsin that based on this new law, a reciprocity agreement would not be in the best interest of Minnesotans. 

“I’d like to thank the Dayton administration, as well as Democratic lawmakers Gene Pelowski and Roger Reinert for working with us on this issue and helping provide overdue tax relief to Minnesotans who work across the border,” said Davids, chairman of the Minnesota House Taxes Committee. 

“Delivering relief for the thousands of Minnesotans who commute across the border to Wisconsin for work has truly has been a collaborative, bipartisan effort,” added Miller, deputy majority leader of the Minnesota Senate. “While I was a strong advocate for a new income tax reciprocity agreement between the two states, the new tax credit will help these workers keep more of their hard earned money.”

In a letter to Wisconsin’s revenue department, Minnesota’s revenue commissioner noted that the refundable reciprocity credit that was enacted in the 2017 will prevent approximately 20,000 Minnesotans from paying more tax than they would have if a reciprocity agreement were in place. A reciprocity agreement would also force Minnesota to collect more than $105 million annually from Wisconsin as more Wisconsin residents work in Minnesota than Minnesotans who work in Wisconsin.

Davids and Miller were pleased with the revenue commissioner’s decision, as taxpayers will benefit from the credits while the State of Minnesota will benefit from the removal of unnecessary red tape. 

The lawmakers also noted that Minnesotans who work in Wisconsin will also continue to file in both states as they have since 2009.