Live in Montana, Work Remotely for a Minnesota Employer: Who Taxes You?
Answer
Only Montana taxes you. Minnesota levies no personal income tax on wages, so nothing is withheld there and you file no Minnesota return. Montana taxes its residents on all income wherever earned, which means your Minnesota earnings go on a Montana resident return in full.
Last verified
Crossing into a state with no income tax does not lower your tax bill, because your home state is not taxing you on where you work — it is taxing you on where you live. Montana reaches all of a resident's income, and Minnesota adds nothing on top.
What you file
- 1Resident return · Montana
File a Montana resident return reporting all of your income.
The two states, side by side
| Montana | Minnesota | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | 1 (Form MW-4) | 2 (Form MWR) |
| Convenience rule | No | No |
| Nonresident return | Form 2 with the nonresident/part-year schedule | Form M1 with Schedule M1NR |
| Credit for other-state tax | Form 2 (credit for income tax paid to another state) | Schedule M1CR |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | Montana Department of Revenue | Minnesota Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Minnesota and working in Montana gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Montana → MinnesotaBoth states — credit offsets the double tax
- 1099 contractor: Montana → MinnesotaHome state, plus the client state if you work there
- Moved mid-year: Montana → MinnesotaTwo part-year returns
Other Montana pairs
Questions people actually ask
I live in Montana and work remotely for a Minnesota employer. Which state do I pay?
Only Montana taxes you. Minnesota levies no personal income tax on wages, so nothing is withheld there and you file no Minnesota return. Montana taxes its residents on all income wherever earned, which means your Minnesota earnings go on a Montana resident return in full.
Which state should my employer be withholding for?
Montana. Your employer should withhold Montana tax rather than Minnesota tax on these wages. If a Minnesota line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my Minnesota employer's location alone create a Minnesota tax obligation?
No. Minnesota sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside Minnesota are a different matter — those are Minnesota-source income and can require a nonresident return.
How current is this?
The Montana and Minnesota rules on this page were last checked against Montana Department of Revenue and Minnesota Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Montana Department of Revenue — individual income taxaccessed 2026-08-07
- Minnesota Department of Revenue — individual income taxaccessed 2026-08-07