Live in Minnesota, Work in Missouri: Which State Taxes Your Paycheck?
Answer
Two returns, one credit. Missouri has the first claim on wages earned inside the state and withholds accordingly. Minnesota then taxes you as a resident on everything and gives credit for what Missouri already took, capped at what Minnesota would have charged on that same income.
Last verified
Two states can lawfully tax the same wages: Missouri because the work happened there, Minnesota because you live there. Nothing prevents the overlap in advance — it is unwound afterwards, on the Minnesota return, through the credit for taxes paid to another state.
A Minnesota resident taxed by another state on the same income claims the credit for taxes paid to other states on Schedule M1CR. The credit is capped at the Minnesota tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
Missouri also has a layer below the state one, and it is the layer that survives every agreement: Kansas City and St. Louis each levy a one per cent earnings tax on wages earned inside the city, collected by the city. Nonresidents pay it on the portion of work performed there.
What you file
- 1Nonresident return · MissouriForm MO-1040 with Form MO-NRI
File the Missouri nonresident return FIRST — you need the Missouri tax figure before you can complete Minnesota.
- 2Resident return · MinnesotaSchedule M1CR
File a Minnesota resident return reporting all income, then claim the credit for tax paid to Missouri. The credit is capped at what Minnesota would have charged on that same income, so if Missouri taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Minnesota | Missouri | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | 2 (Form MWR) | None |
| Convenience rule | No | No |
| Nonresident return | Form M1 with Schedule M1NR | Form MO-1040 with Form MO-NRI |
| Credit for other-state tax | Schedule M1CR | Form MO-CR |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | Yes |
| Revenue department | Minnesota Department of Revenue | Missouri Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Missouri and working in Minnesota gives:Both states — credit offsets the double tax.
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.
- Remote worker: Minnesota → MissouriHome state only
- 1099 contractor: Minnesota → MissouriHome state, plus the client state if you work there
- Moved mid-year: Minnesota → MissouriTwo part-year returns
Other Minnesota pairs
Questions people actually ask
I live in Minnesota and work in Missouri. Which state takes the tax out of my paycheck?
Two returns, one credit. Missouri has the first claim on wages earned inside the state and withholds accordingly. Minnesota then taxes you as a resident on everything and gives credit for what Missouri already took, capped at what Minnesota would have charged on that same income.
Which state should my employer be withholding for?
Missouri. The wages are sourced to Missouri, so Missouri withholding is correct and there is no Minnesota withholding to set up.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. Minnesota gives residents a credit for tax paid to Missouri on the same income, claimed on Schedule M1CR. The credit is capped at the Minnesota tax on that income, so if Missouri taxes it more heavily the excess is not refunded by either state.
How current is this?
The Minnesota and Missouri rules on this page were last checked against Minnesota Department of Revenue and Missouri 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.
- Minnesota Department of Revenue — individual income taxaccessed 2026-08-07
- Missouri Department of Revenue — individual income taxaccessed 2026-08-07