New for 2019,?Minnesota Form W-4MN, Minnesota Employee Withholding Allowance/Exemption Certificate, allows individuals to calculate Minnesota withholding allowances separately from their federal Form W-4. Individuals can provide a completed Form W-4MN to their employer listing their Minnesota allowances and any additional amount they want withheld per paycheck. (Minnesota Department of Revenue email listserv announcement, April 2019.)

As we reported (EY Payroll Newsflash Vol. 20, #003, 1-3-2019), the Department updated Form W-4MN for 2019 to include steps for employees to calculate their Minnesota withholding allowances in section 1 of the form. The Department recommends that employees use Form W-4MN to find their Minnesota withholding allowances separate from their federal allowances. However, if an employee does not complete Form W-4MN, employers can continue to use the allowances from a federal Form W-4 completed by the employee, unless the employee:?

• Claims fewer Minnesota withholding allowances than federal allowances?
• Claims more than 10 Minnesota withholding allowances??
• Requests additional Minnesota withholding to be deducted each pay period, or ???
• Claims to be exempt from Minnesota income tax withholding (employee must meet one of the requirements listed in section 2 of Form W-4MN)?

Employers must send copies of Form W-4MN to the Department if any of the following apply:

• The employee claims more than 10 Minnesota withholding allowances
• The employee claims to be exempt from Minnesota withholding and the employer reasonably expect the employee's wages to exceed $200 per week
• The employer believes the employee is not entitled to the number of allowances claimed

Employers do not need to submit Form W-4MN for employees asking to have additional Minnesota withholding deducted from their pay.

The Department may assess a $50 penalty for each required Form W-4MN an employer does not file when required. Employees may be subject to a $500 penalty if they submit a false Form W-4MN.

For more information on Minnesota withholding, see the Department's website. See also the 2019 withholding tax guide.??

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EY Payroll News Flash