What is the Minnesota Credit for Taxes Paid to Another State?
The Minnesota credit for taxes paid to another state allows residents who are taxed by both Minnesota and another state on the same income to avoid double taxation. This credit is available to individuals who are residents of Minnesota and also paid income tax to another state on the same income earned.
Eligibility Criteria
- You must have been a full-year or part-year Minnesota resident in 2025.
- You must have paid state income tax to both Minnesota and another state (such as Wisconsin) on the same income.
- You must have been a Minnesota resident when both states taxed the same income.
How to Claim the Credit
To claim this credit, you must file Form M1CR with your Minnesota individual income tax return (Form M1). You must also include a statement from the other state’s tax department confirming that you are not eligible to receive a credit on that state’s return for income tax paid to Minnesota.
Important Notes
- The credit applies only to income taxed by both states on the same source.
- It does not apply to composite taxes paid by pass-through entities unless specifically claimed under the instructions.
- For part-year residents, the credit is calculated based on the percentage of income taxable to Minnesota.
Source:
Form M1CR - Credit for Taxes Paid to Another State
Schedule M1RCR - Reciprocity Credit
Minnesota State Instruction Page
Disclaimer: Always verify details with official forms and instructions from the Minnesota Department of Revenue or the Federal IRS. OLT (Online Taxes) provides guidance based on retrieved context and does not guarantee accuracy for all individual circumstances.