Live in North Dakota, Work in Minnesota: Which State Taxes Your Paycheck?
Answer
One state, one form, one return. The North Dakota-Minnesota reciprocal agreement means Minnesota withholding should never start: submit Form MWR to your employer, keep paying North Dakota, and file only in North Dakota. Note that Form MWR belongs to Minnesota, the state where the work is.
Last verified
Reciprocity is the cleanest outcome in multi-state wage tax, and also the one most often missed, because it only works if you file the certificate. The agreement between North Dakota and Minnesota does not apply itself: an employer that never receives Form MWR keeps withholding.
Minnesota's agreements are with Michigan and North Dakota. The employee files Form MWR, Reciprocity Exemption/Affidavit of Residency, with the Minnesota employer — and unlike most such certificates it must be refiled every year. Minnesota's long-standing agreement with Wisconsin ended in 2010 and has not been revived.
The certificate goes to your employer's payroll department, not to Minnesota Department of Revenue, and it is not retroactive — filing it in June does not recover Minnesota tax withheld in January. That money comes back only by filing a Minnesota nonresident return for the year and claiming a refund.
What you file
- 1Give to your employer · MinnesotaForm MWR
Give your employer Form MWR so Minnesota stops withholding. This goes to the employer, not to Minnesota Department of Revenue — and it is not retroactive, so file it before the first paycheck of the year.
- 2Resident return · North Dakota
File a North Dakota resident return reporting all of your income, including the wages earned in Minnesota.
The two states, side by side
| North Dakota | Minnesota | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | 2 (Form NDW-R) | 2 (Form MWR) |
| Convenience rule | No | No |
| Nonresident return | Form ND-1 with Schedule ND-1NR | Form M1 with Schedule M1NR |
| Credit for other-state tax | Schedule ND-1CR | Schedule M1CR |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | North Dakota Office of State Tax Commissioner | Minnesota Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Minnesota and working in North Dakota gives:Reciprocal agreement — file the exemption form.
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: North Dakota → MinnesotaHome state only
- 1099 contractor: North Dakota → MinnesotaHome state, plus the client state if you work there
- Moved mid-year: North Dakota → MinnesotaTwo part-year returns
Other North Dakota pairs
Questions people actually ask
I live in North Dakota and work in Minnesota. Which state takes the tax out of my paycheck?
One state, one form, one return. The North Dakota-Minnesota reciprocal agreement means Minnesota withholding should never start: submit Form MWR to your employer, keep paying North Dakota, and file only in North Dakota. Note that Form MWR belongs to Minnesota, the state where the work is.
Which state should my employer be withholding for?
North Dakota. Your employer should withhold North Dakota tax rather than Minnesota tax on these wages, but only once you have given payroll Form MWR — the exemption is not automatic and it does not apply retroactively. If a Minnesota line is showing on your pay stub, raise it with payroll now rather than at filing time.
What if Minnesota tax was already withheld from my pay?
File Form MWR with your employer to stop it going forward, then recover what was already taken by filing a Minnesota nonresident return for that year and claiming a refund of the full amount. North Dakota will still expect its own tax on the same wages, so do not treat the refund as a windfall.
How current is this?
The North Dakota and Minnesota rules on this page were last checked against North Dakota Office of State Tax Commissioner 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.
- North Dakota Office of State Tax Commissioner — individual income taxaccessed 2026-08-07
- Minnesota Department of Revenue — individual income taxaccessed 2026-08-07