Last August, the Minnesota Department of Revenue made changes to the instructions for Form W-4MNP, Minnesota Withholding Certificate for Retirement Account, Pension, or Commercial Annuity Payments.

Since these changes, we were informed that some retirement account, pension, and annuity payers are automatically withholding 6.25% from payments. We want to clarify when you should and should not do this.

When should I withhold 6.25% from pension and annuity payments?

Withhold at the default rate of 6.25% only if either of these apply:

• The recipient chooses this amount
• The recipient did not set a previous withholding rate or amount after you requested they do so

If your recipient:

• Has a withholding arrangement on payments, you must continue using it unless they send you a new Form W-4MNP. Do not automatically change their rate to 6.25%.
• Does not have a withholding arrangement on payments, contact them to complete Form W-4MNP (Revision Date 8/15/23) before withholding at the 6.25% rate.

Does Minnesota require withholding on these payments? 

Yes, unless the recipient asks you not to withhold.

What if I have questions about withholding on these payments?

Call us at 651-282-9999 or 1-800-657-3594, or email [email protected].

We will also provide more details about the updates to the Form W-4MNP instructions, in January 2024.

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